LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034 B.A. DEGREE EXAMINATION – CORPORATE & SECRETARYSHIP
|
SIXTH SEMESTER – APRIL 2007
CR 6600 – MANAGEMENT ACCOUNTS
Date & Time : 16-04-2007/9.00-12.00 Dept. No. Max. : 100 Marks
SECTION – A
Answer all the questions. 10 x 2 = 20
- What is ratio analysis?
- Define ‘Budget’.
- A project costs Rs. 5,00,000 and yields annually a profit of Rs. 80,000 after depreciation at 12% p.a. but before tax at 50%. Calculate pay-back period.
- Define Fund Flow Statement.
- Calculate Net profit ratio. Sales Rs.3,50,000, Cost of goods sold Rs.1,50,000
Administrative expenses Rs.50,000 Selling expenses Rs. 10,000.
- Define financial statements.
- Write the ‘Principles’ for preparation of Working Capital Statement.
- Define current asset.
- Suresh and company supplies the following information regarding the year ended 31-12-2000. Cash sales Rs. 80,000; Credit sales Rs. 2,00,000’ Return inward Rs. 10,000; Opening stock Rs. 25,000; Closing stock Rs. 30,000; Gross profit ratio is 25%; Find out inventory turnover ratio.
- What is the objective of ‘cash budget’?
SECTION – B
Answer any FIVE questions. 5 x 8 = 40
- Johnson Ltd. has Rs. 80,000 to invest. It has two alternative proposals at hand for consideration. The alternatives are:
| Product X
Rs. |
Product Y
Rs. |
|
| Investment outlay
Cash inflows: Year 1 2 3 4
|
80,000
32,000 32,000 36,000 — 1,00,000 |
80,000
30,000 30,000 30,000 10,000 1,00,000 |
Required:
- Which investment proposal would you recommend under pay-back method?
- Would your decision be different if proposal Y has Rs. 40,000 in the third year instead of Rs. 30,000 inflow?
- Calculate the Debtors turnover ratio from the following.
Rs.
Total sales for the year 1987 1,00,000
Cash sales for the year 1987 20,000
Debtors as on 1-1-1987 10,000
Debtors as on 31-12-1987 15,000
Bills receivable as on 1-1-1987 7,500
Bills receivable as on 31-12-1987 12,500
- From the following information show the results of operations of manufacturing concern using trend percentages with 2004 as base year.
(amount in ‘000s)
| Particulars | 2001 | 2002 | 2003 | 2004 |
| Sales
Cost of goods sold Gross profit Total selling expenses Net operating profit |
1,300
728 572 120 452
|
1,200
696 504 110 394 |
950
589 361 97 264 |
1,000
600 400 100 300 |
- Explain the characteristics of management accounting.
- You are required to calculate the following:
(a) Working capital turnover (b) Fixed assets turnover (c) Capital turnover
The information available is as under:
Capital employed : Rs. 4,00,000 Current liabilities : Rs. 40,000 Current assets ; Rs. 2,00,000
Net fixed assets : Rs. 2,50,000 Sales: Rs. 5,00,000 Cost of sales: Rs. 4,00,000
- What are the advantages of ratio analysis?
- Explain the most important techniques of analysis and interpretation of financial statements.
- Calculate funds from operations from the following profit and loss Account:
Profit and Loss Account
Dr Cr
| Particulars | Rs. | Particulars | Rs. |
To Expenses paidTo Depreciation To Loss on sale of Building To Discount To Goodwill To Net profit |
1,00,000
40,000 15,500 500 12,000 52,000 ———–2,20,000 |
By Gross Profit
By Gain on sale of machinery |
2,00,000
20,000
———– 2,20,000
|
SECTION – C
Answer any TWO questions. 2 x 20 = 40
19. The following aer the Balance sheets of Domi co. Ltd as on 31-12-2000 and 31-12-2001.
Balance Sheets
| Liabilities | 2000
Rs. |
2001
Rs. |
Assets |
2000
Rs. |
2001
Rs. |
| Share capital
General reserve P & L A/c B ank Loan Creditors Provision for taxation |
1,00,000
25,000 15,250 35,000 75,000 15,000
2,65,250 |
1,25,000
30,000 15,300 – 67,600 17,500
2,55,400 |
Building
Machinery Stock Debtors Cash in hand Cash at bank Investment |
1,00,000
75,000 50,000 40,000 250 – – 2,65,250
|
95,000
85,500 37,000 31,100 300 4,000 2,500 2,55,400 |
Additional Information:
(a) dividend of Rs. 11,000 was paid (b) Machinery was purchased for Rs. 15,000
(c) Income tax paid during the year Rs. 16,500. Prepare Cash Flow Statement.
- Using the information given below prepare a cash budget showing expected cash receipts and
disbursement for the month of May and balance expected at May – 31 – 1986. Budgeted cash balance
May 1, 1986 R. 60,000.
Sales:
March Rs. 5,00,000
April Rs. 3,00,000
May Rs. 8,00,000
Half collected in the month of sales, 40% in the next month and 105 in the third month.
Purchases:
April Rs. 2,50,000
May Rs. 4,00,000
40% paid in the month of purchase and 605 paid in the next month.
Wages due in May for Rs. 88,000. 3 years insurance policy due in May for renewal Rs. 2,000 to be paid in cash. Other expenses for May, payable in May, Rs.44,000. Depreciation for the month of May Rs. 2000. Accrued taxes for May payable in December Rs. 6,000. Fixed deposit receipts due May 15th Rs. 1,75,000 plus Rs. 10,000 interest.
- The cost of an article at a capacity level of 5,000 units is given below:
Rs.
Material cost 25,000 (100% variable)
Labour cost 15,000 (100% variable)
Power 1,250 (80% variable)
Repairs 2,000 (75% variable)
Stores 1,000 (100% variable)
Inspection 500 (20% variable)
Depreciation 10,000 (100% variable)
Administrative overheads 5,000 (25% variable)
Selling overheads 3,000 (25% variable)
———
62,750
———
Cost per unit Rs. 12.55
Find the unit cost of the product at production levels of 4,000 units and 6,000 units.
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