Tuesday, February 17, 2009

October 2008

Management Accounting

Time: 3Hours                                                Marks: 100


N.B:
1. Questions No. 1 is compulsory and carries 20 marks.
2. Attempt any five from the rest questions,each carrying 16 marks
from remaining questions.
3. Working notes should form part of your answer.
4.Proper presentation and neatness is essential.
5. Use of simple calculator is allowed.

Q.1.
ABC Ltd. provides you following Balance-sheets as on 31st March: (20)

Trading and Profit and Loss Account for the year ending on 31st March, 2007
Liabilities 2006 Rs. 2007 Rs. Assets 2006 Rs. 2007Rs.
Equity Share Capital 15,00,000 24,00,000 Fixed Assets 30,00,000 31,00,000
10% Preference Share Capital 20,00,000 15,00,000 Investments 22,60,000 28,00,000
Profit & Loss A/c 20,08,000 20,58,000 Inventory 9,20,000 8,00,000
15% Debentures 3,00,000 10,00,000 Debtors 12,00,000 11,00,000
Bank Loan (Long Term) 4,40,000 - Bills Receivable 5,75,000 6,00,00
Creditors 12,48,000 8,60,000 Cash 2,21,000 5,48,000
Provision for Tax 4,80,000 7,30,000 Proposed Dividend 2,00,000 4,00,000
Total 81,76,000 89,48,000 Total 81,76,000 89,48,000


The following information is given for the year ended on 31st March, 2007:
  1. 10% Preference shares were redeemed out of fresh issue of Equity shares on 1st April, 2006.
  2. Partly paid Equity shares were converted into a fully paid shares by utilizing Rs. 4,00,000 from Profit and Loss A/c during the year.
  3. Interim dividend of Rs. 1,00,000 was paid.
  4. Depreciation was charged during the year Rs. 2,00,000.
  5. Fixed Assets were revalued in excess of book value and amount was credited to Profit and Loss A/c.
  6. Dividend on Equity shares paid for the year 2005-08 Rs. 2,00,000.
  7. Tax paid Rs. 5,50,000.

Prepare fund flow statement and statement showing changes in working capital in detail for the year ended on 31st March, 2007.



Q.2.
You are required to prepare a statement showing the working capital required to finance the level of activity of 12,000 Units per year from the following information: (16)
1. Raw materials are in stock on an average for 2 months
2. Materials are in process on an average for half a month.
3. Finished goods are in stock on an average for one month.
4. Credit allowed by the suppliers is 1½ months of purchase of raw materials and credit allowed to the customers is 2 ½ months.
5. Lag in payment of wages and overheads is one month.
6. Cash and Bank balance is expected to be 10% of Net working
7. Capital before considering the Cash and Bank balance.
8. Activities are spread evenly through out the year:

Cost Per Unit:
Raw Material - Rs. 10
Wages - Rs. 5
Total Cost - Rs. 30
Profit is 20% on selling price.




Q.3.
The following is financial information of ZN Ltd. for 3 years ended on 31st December every year. (16)
Particulars 2005 Rs. 2006 Rs. 2007 Rs.
Share Capital 1,50,000 1,80,000 1,90,000
Gross profit 3,50,000 3,50,000 4,00,000
Current liabilities 40,000 ?
Fixed Assets 2,40,000 2,50,000 2,35,00
Long Term Loan 1,00,000 ? 1,20,000
Cost of Goods Sold ? 4,00,000 3,00,00
Working Capital 60,000 4,50,000 1,40,000
Net Worth 2,00,000 2,20,000 2,55,000
Current Assets ? 1,20,000 2,00,000
Sales 5,50,000 7,50,000
Capital Employed 3,00,000 ? ?
Reserve and Surplus ? 40,000 65,000

You are required to prepare vertical Trend Financial Statement taking 2005 as the Base.


Q.4.
Complete the following Balance-sheet from the information given below: (16)

Liabilities Rs. Assets Rs.
Equity Share Capital (Rs.100 each) ? Fixed Assets ?
Reserve and Surplus ? Current Assets
20% Debentures 5,00,000 Stock ?
Current Liabilities Debtors ?
Sundry Creditors ? Bank / Cash Balance ?
Provision for Tax,(Current Year) ?
? ?


Following information is available:

1. Gross profit ratio is 25% and which is Rs. 12,00,000.
2. Operating expenses (including Debenture interest) Rs. 8,00,000.
3. Rate of Income Tax is 50%.
4. Purchases and Sales are on credit basis.
5. Debtors Turnover Ratio (Sales / Debtors) = 12 times.
6. Creditors Turnover Ratio (Cost of sales / creditors) = 12 times
7. Earning per share Rs. 20
8. Stock Turnover Ratio = 10 times
9. Debt Equity Ratio 0.25 : 1
10.Current Ratio 2 : 1.


Q.5.
Prepare a Comparative Revenue Statement in Vertical Form from the following details:(16)



Nilkamal Ltd.
Trading, Profit and Loss Account for the year ended 31st March
Particulars 2006 Rs. 2007Rs. Particulars 2006 Rs. 2007 Rs.
To Opening Stock 2,25,000 3,00,000 By Sales 45,00,000 60,00,000
To Purchases 22,50,000 32,10,000 By Closing Stock 3,00,000 3,60,000
To interest on Debenture 1,50,000 1,50,000 By Dividend 12,000 39,000
To Depreciation: By Profit on Sale of Machinery 24,000 -
Furniture 15,000 15,000
Machinery 36,000 30,000
To Administrative Expenses 2,94,000 4,41,000
To Selling Expenses 4,56,000 7,53,000
To Carriage Outward 75,000 3,15,000
To Loss by Fire - 15,000
To Wages 1,95,000 3,00,000
To Provision for Tax 5,70,000 4,35,000
To Net Profit 5,70,000 4,35,000
48,36,000 63,99,000 48,36,000 63,99,000


Q.6.
Telestar Ltd. gives you the following Balance - Sheets for the year ended 31 st March, 2006 and 2007. Prepare a Cash Flow Statement for the year ended 31st March, 2007 as per As - 3 by indirect method. (16)

Liabilities 31-3-06 Rs. 31-3-07Rs. Assets 31-3-06Rs. 31-3-07Rs.
Equity Share Capital 1,20,000 1,20,000 Land 2,10,000 2,70,000
5% Preference Share Capital 90,000 60,000 Building 2,85,000 2,70,000
General Reserve 30,000 42,330 Stock 27,000 36,300
Profit and Loss Account 15,240 28,080 Debtors 40,440 38,460
Provision for Tax 17,000 8,000 Prepaid Expenses 25,880 17,000
Creditors 3,37,920 3,81,990 Bank Balance 15,840 3,240
Misc Expenditure 6,000 5,400
Total 6,10,160 6,40,400 Total 6,10,160 6,40,400


Other information for the year ended 31st March,2007:
(1) The company has paid Interim dividend of 5 %on Equity shares.
(2) Preference shares were redeemed during the year at 10% premium.
(3) Income Tax paid during the year Rs. 15,000.

Q.7.
From the following information calculate: (16)
(a) Return on Capital Employed.
(b) Debtors turn over ratio (in Times)
(c) Stock - working capital ratio
(d) Current ratio
(e) Proprietory ratio (on the basis.of Total Fund)

Some of relevant balances as on 31st March, 2007 are given below:
Particulars Amount(Rs.)
Equity share capital (of Rs. 10 each) 2,00,000
6% Preference share capital 1,00,000
8% Debentures 1,50,000
Debtors 18,000
Creditors 15,000
Cash in hand 20,000
Bills receivable 12,000
Bank Overdraft 8,000
Reserves and Surplus 43,000
Closing Stock 32,500
Provision for taxation 35,000
Proposed dividends 10,000


Other information for the year 2006-07:

Particulars Amount (Rs.)
Sales 10,00,000
Cost of Sales 7,50,000
Net profit before Tax 1,00,000


Q.8.
The following information regarding Maruti car Ltd. for the year ended 31st March.2007 is given to you. (16)



particulars Rs.
Sales 75,00,000
Purchases 50,00,000
Opening Stock (01/04/2006) 5,00,000
Closing Stock (31/03/2007) 7,50,000
Return Inward 75,000
Carriage Outward 57,000
Carriage Inward 50,000
Return Outward 50,000
Salesmen Salary 75,000
Advertising and Publicity 2,52,000
Salesmen Travelling Allowance 7,500
Office Salary 4,00,000
Computer Repairs and Maintenance 84,000
Rent, Rates, Taxes 4000
Printing and Stationery 400
Bad Debts 75,750
Purchase of Computer 40,000
Dividend on Shares (Cr) 10,000
Staff Welfare Expenses 44,000
Interest (Dr.) 50,000
Loss on Sales of Shares 1,25,000


Rearrange above information in Vertical Form suitable for analysis.

Q.9.
(a) From the following information calculate the amount of Creditors 0pening Stock and Closing Stock: (5)



Cost of Sales Rs.3,25,000
Gross Profit Ratio 35%
Stock Turn Over ratio 2.5
Creditors Turnover Ratio (On Purchaes) 8


Opening Stock is more by Rs. 6,000 than Closing Stock.

(b) Working Capital is Rs. 3,00,000.Quick Ratio is 1.25 : 1.and Current Ratio is 2:1.The Bank Overdraft is Rs.20,000.Non quick assets includes closing stock only.Calculate Closing Stock. (4)

(c) Write short notes on : (any two) (6)
i) Fund Flow Statement and Cash Flow Statement.
ii) Limitations of Ratio Analysis.
iii) Trend Analysis.
iv) MIS Reporting.

April 2008

Management Accounting

Time: 3Hours                                                  Marks: 100

N.B:
1. Questions No. 1 is compulsory and carries 20 marks.
2. Attempt any five from the rest questions,each carrying 16 marks
from remaining questions.
3. Working notes should form part of your answer.
4.Proper presentation and neatness is essential.
5. Use of simple calculator is allowed

Q.1.
Certain items of the annual accounts of AB Ltd. are missing as shown below: (20)
Trading and Profit and Loss Account for the year ending on 31st March, 2007
Particulars Amount Rs. Particulars Amount Rs.
To Opening Stock 4,37,500 By Sales ?
To Purchases ? By Closing stock ?
To Direct Expenses 1,09,375
To Gross Profit ?
Total ? Total ?
To Administrative Expenses 2,66,000 By Gross Profit ?
To Interest on Debentures 37,500 By Commission 62,500
To Provision for Taxes ?
To Net profit After Tax 3,30,000
Totalv ? Total ?


Balance Sheet as on 31st March, 2007

Liabilities Amount Rs. Assets Amount Rs.
Profit and Loss Account 1,34,375 Stock ?
(Including Opening Balance) Debtors ?
10% Debentures ? Bank Balance78,000
Creditors ?
Proposed Dividend (C.Y.) ?
Provision for Taxes (C.Y.) ?
Total ? Total ?

You are required to complete the Financial Statements with the help of the following information :

Current ratio is 2 : 1.
Stock turn over ratio is 1.60
Proposed dividends are 25% of share capital.
Gross profit ratio is 50%.
Transfer to General Reserve is 70% of proposed dividends.
Provision for Taxes is 50% of profit after tax.
There is no opening balance in General Reserve Account.
Creditors' turn over ratio (on purchases and closing creditors) is 10 : 2

Q.2.
From following information given by Tata Ltd. estimate working capital requirement for year ending 31st March, 2009: (16)
Estimated Production 120 NANO CARS (Per Year)
PER CAR RATE
STEEL 1000 KG Rs. 70 per kg.
SPARES 20 KG Rs. 60 per kg.
ENGINE 1 Rs. 20,000 per engine
LABOUR 50 HRS Rs. 100 per hr.
OVERHEAD Rs. 20,000


(1) Steel remains in stock for two months, spares remains in stock for half month and engine remains in stock for one month.
(2) Suppliers of steel allows credit of two months, suppliers of spares allow credit for one month and suppliers of engine allows credit for half month.
(3) Production process takes half month.
(4) Time lag in payment of labour and overhead is one month.
(5) Car (finished goods) remains in stock for one month.
(6) Activity is spread evenly throughout the year.

Q.3.
Balance Sheets of Star Ltd. for the year ended 31st December, 2006 and 31st December, 2007 16 are as follows :- (16)

Liabilities 31st Dec. 06 Rs. 31st Dec. 07Rs. Assets 31st Dec. 06 Rs. 31st Dec. 07Rs.
Equity Share Capital 8,00,000 8,00,000 Building 6,00,000 5,40,000
10% Pref. Share Capital 6,00,000 6,00,000 Land 2,00,000 2,00,000
General Reserves 4,00,000 4,90,000 Plant 6,00,000 5,40,000
15% Debentures 2,00,000 3,00,000 Furniture 2,00,000 2,80,000
Creditors 3,00,000 4,00,000 Stock 4,00,000 6,00,000
Bills Payable 1,00,000 1,50,000 Debtors 4,00,000 6,00,000
Tax Payable 2,00,000 3,00,000 Cash 2,00,000 2,80,000
26,00,000 30,40,000 26,00,000 30,40,000


Prepare Comparative Balance Sheet in vertical form and offer your comments in brief on fixed Assets.

Q.4.
From the following Balance Sheet and information of SNEHAL LTD. prepare fund flow statement and schedule of item-wise changes in working capital for the year ended 31st December, 2006 and 2007. (16)
Balance Sheet as on 31st December

Liabilities 2006 Rs. 2007 Rs. Assets 2006 Rs. 2007 Rs.
Equity Share Capital 9,00,000 12,00,000 Fixed Assets 18,80,000 13,40,000
(Rs. 100 each) Trade Investment 3,00,000 3,00,000
7% Preference Share8,00,000 6,00,000 Stock 3,40,000 4,50,000
Capital (Rs. 100 each) Sundry Debtors 5,30,000 8,50,000
General Reserve 3,90,000 1,90,000 Cash and Bank Bal 2,30,000 4,50,000
Profit and Loss A/c. 3,10,000 5,00,000
Capital Reserve - 20,000
Security Premium - 10,000
10% Debenture 4,00,0002,00,000
Creditors 1,80,000 3,40,000
Bills Payable 70,00040,000
Provision for Tax 2,30,000 2,90,000
32,80,000 33,90,000 32,80,000 33,90,000


Additional Information for the Year 2007:

1. On 31st December, 2007 accumulated Depreciation on Fixed Assets was Rs. 4,80,000 and 31st December, 2006 was Rs. 3,60,000. Machinery costing Rs. 4,20,000 included in Fixed Assets (W.D.V. Rs. 2,60,000) sold for Rs. 1,80,000.
2. During the year Investment costing Rs. 1,00,000 were sold and profit on sale was credited to Capital Reserve.
3. Tax paid during the year amounted to Rs. 2,50,000.
4. Issued 1,000 Equity Shares to the public at a premium of Rs. 10 per Share and Balance indicate Bonus issue out of General Reserve.
5. Dividend received on Investment was Rs. 30,000 out of which Rs. 10,000 was for a period prior to purchase of Investment.

Q.5.
From the following information prepare the Common size Revenue Statement with Amount and % for the year ended on 31st March, 2007 in a vertical form suitable for analysis : (16)
Particulars% on net sales of Rs. 5,00,000
Opening stock 2
Closing stock 3
Purchases 52
Office expenses 4.75
Other administrative expenses 5.75
Distribution expenses 6
Selling expenses 4
Interest (Dr.) 1.50
Indirect wages 1.50
Direct Wages 2


Provision for Income tax is to be made @ 25% on net profit before tax.

Q.6.
From the following Balance Sheets of XYZ Ltd. as on 31-3-2006 and 31-3-2007, prepare cashflow statement for the year ended 31-3-2007 as per AS-3 by indirect method: (16)

Liabilities 31-3-06 Rs. 31-3-07Rs. Assets 31-3-06Rs. 31-3-07Rs.
Equity Share Capital 45,00,000 12,00,000 Land 15,00,000 11,50,000
General Reserve 3,00,000 5,00,000 Machinery 13,50,000 28,70,000
Capital Reserve - 3,00,000 Investments 9,00,000 7,00,000
Profit and Loss A/c. 3,00,000 4,00,000 Stock 14,00,000 16,00,000
Creditors 6,00,000 9,00,000 Debtors 9,00,000 13,50,000
Provision for Tax 5,00,000 5,50,000 BillsReceivable 2,45,000 2,90,000
Proposed Dividend 3,95,000 4,50,000 Cash/Bank Balance 3,00,000 3,90,000
65,95,000 83,50,000 65,95,000 83,50,000


Additional Information for the year ended 31st March, 2007:

(1) During the year Machinery was sold for Rs. 2,00,000 (W.D.V. Rs. 2,25,000).
(2) During the year Depreciation provided on Machinery was Rs. 3,00,000.
(3) Profit on sale of land was transferred to Capital Reserve.
(4) Interim Dividend paid during the year Rs. 2,00,000
(5) Profit on sale of Investment was transferred to General Reserve.
(6) Income tax paid during the year 2007 is Rs. 4,50,000.

Q.7.
Profit and Loss A/c. and Balance Sheet of SIDHARTH LTD. for the year ended 31st March, 2007: (16)



Trading, Profit and Loss Account for the year ended 31st March 2007
Particulars Rs. Particulars Rs.
To Opening Stock 70,000 By Sales 9,00,000
To Purchases 5,40,000 By Closing Stock 80,000
To Wages 2,14,000
To Gross Profit c/d. 1,56,000
9,80,000 9,80,000
To Salaries 26,000 By Gross Profit b/d. 1,56,000
To Rent 5,000 By Interest on investment 5,000
To Miscellaneous Expenses 15,000
To Selling Expenses 10,000
To Depreciation 30,000
To Interest 5,000
To Provision for Tax 20,000
To Net Profit c/d. 50,000
1,61,0001,61,000

Balance Sheet as on 31st March, 2007
Liabilities Rs. Assets Rs. Rs.
Equity Share Capital (Rs. 10) 1,50,000 Fixed Assets 1,60,000
8% Preference Share Capital 1,30,000 1,00,000 (Less:)Depreciation 30,000 1,30,000
Reserve and Surplus 62,000 investment 1,00,000
10% Debenture 50,000 Stock 80,000
Bank Loan (Payable after 5 years) 40,000 Debtors 60,000
Creditors 60,000 Bills Receivable 50,000
Provision for Tax (C. Y.) 20,000Cash 85,000
Bank Overdraft 20,000 Preliminary Expenses 5.000
Proposed Pref. Dividend 8,000
5,10,000 5,10,000


Note : Market value of Equity share is Rs. 12 and Dividend paid per Equity share is Rs. 2.

Calculate the following ratio :
(a) Acid Test Ratio.
(b) Capital Gearing Ratio.
(c) Operating Ratio.
(d) Dividend Payout Ratio.
(e) Debt Service Ratio.
(f) Creditors Turnover Ratio.
(g) Earning per Share.
(h) Stock Turnover Ratio.
Note: Vertical final accounts need not be prepared.

Q.8.
From the following information of Mahindra Ltd. for the year ended 31st March, 2006 and 31st March 2007, you are required to comment with the help of comparative statement after rearranging in Vertical Form suitable for analysis (16)


2006 Rs. 2007 Rs.
Sales 15,20,000 22,80,000
Return Inward 20,000 30,000
Opening Stock-Raw Material 7,600 7,600
Purchases of Raw Material 3,90,000 5,85,000
Work in Progress-Opening 10,000 10,000
Work in Progress-Closing 10,000 15,000
Closing Stock-Raw Material 7,600 11,400
Power 50,400 75,600
Depreciation on Machinery70,000 1,05,000
Repairs Factory Building 40,000 60,000
Direct Labour 2,50,500 3,75,750
Selling and Distribution Expenses 1,05,400 1,58,100
Finance Expenses 70,000 70,000
Administrative Expenses 73,500 73,500


Q.9.
(a) State wheather following is True or False: (5)

i) Payment for purchase of computer will reduce working capital.
ii) As per Standard Current Ratio, Current Assets of a concern must always be equal to its Current Liabilities.
iii) Fund Flow Statement shows movement of cash during the year.
iv) Proprietory Ratio shows turnover of fixed asset during the year.
v) Operating Expenses Ratio and Operating Ratio are same.

(b) From each of the following sets, state the odd one out clearly :- (5)

i) Selling Expense, Financial Expense, Direct Expense, Administration Expense.
ii) Packing charges, Commission on Sales, Advertisement, Rent paid – Office.
iii) Opening Stock, Purchases, Purchase Returns, Commission received.
iv) Fuel Expenses, Carriage outward, Wages paid, Carriage on purchases.
v) Advertisement, Commission paid, Interest received, Royalty paid for Manufacture.

(c) Write short notes on : (any two) (6)
i) Capital Gearing Ratio
ii) Working Capital Cycle
iii) Enumerate MIS Reports
iv) Limitations of Financial Statements.

October 2007

Management Accounting

Time: 3Hours                                            Marks: 100

N.B:
1. Questions No. 1 is compulsory and carries 20 marks.
2. Attempt any five from the rest questions,each carrying 16 marks
from remaining questions.
3. Working notes should form part of your answer.
4.Proper presentation and neatness is essential.
5. Use of simple calculator is allowed

Q.1.
From the following Balance Sheets of Z. Ltd. prepare a Cash Flow Statement as per AS-3 for the year ended 31 December, 06 by indirect method. (20)
Liabilities2005 Rs. 2006 Rs. Assets 2005 Rs. 2006 Rs.
Equity Share Capital 2,00,000 2,50,000 Fixed Assets 3,02,500 2,85,000
10% Pref. Share Capital 1,00,000 - Debtors 60,000 70,000
5% Debentures (issued on 1-7-2006) - 50,000 Stock 1,00,000 90,000
Capital Redemption Reserve - 50,000Bank 45,000 30,000
Profit and Loss A/c. 1,25,000 30,000 Preliminary Expenditure 30,000 20,000
Creditors 75,000 70,000-
Bills Payable 37,500 45,000
-5,37,500 4,95,000- 5,37,500 4,95,000


Additional Information:

1. Preference Shares were redeemed at 10% premium on 1-7-2006 with half yearly dividend.
2. Fixed assets were purchased for Rs. 97,500 on 1-10-2006.
3. Dividend of Rs. 20,000 on equity shares was paid.
4. Fixed Assets having original cost of Rs. 1,00,000 on which accumulated Depreciation was Rs. 30,000 was sold on 30-9-2006 at Rs. 40,000.

Q.2.
From the following figures, prepare an estimate of the working capital: (16)


Production 30,000 units
Selling Price per unit Rs. 10
Raw Material 60% of selling price
Direct wages 1/6th of raw material.
Overheads Twice the Direct wages
Material in hand 2 months requirement
Production time 1 month
Finished goods in stores 3 month
Credit for material 2 month
Credit allowed to customers 3 month
Average cash balance Rs. 40,000


Wages and overheads are paid in the beginning of next month. In production all the material are charged in the initial stage and wages and overheads accrue evenly.

Q.3.
Prepare a funds flow statement from the following details presented to you by Anand Chemical Ltd. (16)

Balance Sheet as at 31st March
Liabilities 2006 Rs. 2007 Rs. Assets 2006 Rs. 2007 Rs.
Share Capital 4,00,000 5,00,000 Land and Building 4,00,000 3,80,000
Reserves 1,00,000 1,20,000 Plant and Machinery 3,00,000 3,40,000
Profit and Loss A/c. 50,00060,000 Goodwill - 10,000
Bank Loan 1,40,000 - Working Capital 50,000 20,000
Provision for Taxation 60,000 70,000 --
- 7,50,000 7,50,000 -7,50,000 7,50,000


Q.4.
Following is the Balance Sheet of Abhijeet Ltd. as on 31st March, 2006. (16)
Liabilities Rs. Assets Rs.
Equity Share Capital 3,90,000 Cash in Hand 15,000
10% Preference Share Capital 2,00,000 Cash at Bank 90,000
9% Debenture 2,50,000 Preliminary Expenses 20,000
General Reserve 60,000 Goodwill 1,00,000
Capital Reserve 50,000 Building 3,00,000
11 % Bank Loan 1,00,000 Investment (Long-Term) 2,00,000
Creditors 1,25,000 Furniture 2,50,000
Bank Overdraft 1,35,000 Plant and Machinery 3,00,000
Provision for Tax 1,40,000 Debtors 1,50,000
Proposed Dividend 30,000 Prepaid Expenses 50,000
Profit and Loss A/c 1,40,000 Stock 2,00,000
Depreciation provision 80,000 Calls in arrears (Equity) 10,000
- Commission on Issue of Shares 15,000
17,00,000 - 17,00,000


Present the above Balance Sheet in vertical form and show the following:
1. Net worth.
2. Borrowed Fund.
3. Capital Employed.
4. Net Block.
5. Working Capital.
6. Fictitious Assets.



Other Details:
1. Company paid dividend at 11.5% on opening capital.
2. New shares were issued to a vendor for the business sold by him comprising stock Rs. 40,000 and Machinery Rs. 50,000.
3. Machinery purchased for cash Rs. 60,000.
4. Depreciation written off during the year: Building Rs. 20,000 and Machinery Rs. 35,000.
5. Old Machinery was sold during the year at a Profit of Rs. 5,000.
6. Income Tax paid during the year Rs. 54,000.

Q.5.
Rearrange above data of Petrol Ltd. In suitable form for analysis and calculate Trend Percentage and offer your comments. (16)
Year Fixed Investments Current Preliminary Total Owner's Term Debenture Total
-Assets - Assets Expenses Assets Fund Loan - Liabilities
2000 20 10 40 5 75 20 20 35 75
2001 22 9 30 4 65 20 20 25 65
2002 24 8 20 3 55 20 20 15 55
2003 26 7 30 2 65 40 20 5 65
2004 28 6 40 1 75 60 15 0 75


Q.6.
Following are the financial statements of two similar companies: (16)
Balance sheet as at 31st December, 2006
Liabilities X Ltd. Rs. Y Ltd. Rs. Assets X Ltd. Rs. Y Ltd. Rs.
Share Capital-- Land and Building 1,400 1,200
Equity Share of Rs. 10 each 4,000 4,000 Plant 4,100 3,200
Revenue Reserve 1,950 1,600 Stock 2,850 2,100
8% Debenture 1,000 1,000 Debtors 2,600 1,900
Trade Creditors 2,800 1,400 Investment (Long Term) - 300
Other Creditors 250 200 Bank 100 300
Provision for Tax 900 700 Deposit 150 100
Proposed Dividend 300 200 -
-11,200 9,100 -11,200 9,100




Income Statement for 2006
-X Ltd. Y Ltd. -X Ltd. Y Ltd.
Cost of Sales 10,800 9,000 Sales 15,000 12,000
Operating Expenses 2,9002,000 ---
Taxation 550410 ---
Net Profit after Tax 750 590 -- -
- 15,000 12,000 - 15,000 12,000


On the basis of above information. You are required to compute separately the following ratio:

1. Capital Gearing Ratio.
2. Current Ratio.
3. Debtors Turnover Ratio.
4. Return on Proprietory Fund.

Vertical final accounts need not be prepared.

Q.7.
From the following information find out missing figures and rewrite the Balance Sheet: (16)
Current Ratio 2:1
1. Acid Test Ratio 5:3
2. Reserves and Surplus are 50% of Equity Share Capital.
3. Long Term Debts are 60% of Equity.
4. Stock Turnover Ratio 10 times.
5. Gross Profit Ratio on sales 20%.
6. Sales are Rs. 15,62,500 (25% Cash Sales and balance on credit)
7. Closing stock is Rs. 50,000 more than Opening Stock.
8. Accumulated Depreciation is 1/6 original Cost of Fixed Assets.

Balance Sheet as at 31st March, 2007

Liabilities Rs. Assets - Rs.
Equity Share Capital ? Fixed Assets (at cost) ? -
Reserves and Surplus ? Less: Accumulated Depreciation ? ?
Long Term Loans 9,00,000 Stock - ?
Bank Overdraft 50,000 Debtors - 2,00,000
Creditors? Cash - ?
-? -- ?


Q.8.
Complete the following common size Income Statement: (16)

Particulars Rs. %
Gross sales 9,90,000 ?
Less: Sales Return ? 10
Net Sales ? ?
Less :Cost of Sales ? 40
Gross Profit ? ?
Less : Operating expenses--
(a)Administrative Expenses ? ?
(b)Finance Expenses ? 2
(c)Selling and Distribution Expenses 72,000 ?
Operating Net Profit ? ?
Add Non Operating Income 45,000 ?
Less: Non Operating Expenses ? 15
Net Profit before Tax ? 30


Q.9.

(a)Working Capital is Rs. 90,000. Total Debt are Rs. 1,95,000. Long Term Debt are Rs. 1,50,000.

Stock is Rs. 37,500. Prepaid Expenses are Rs. 7,500. Calculate Liquid Ratio. (3)

(b) Find out Funds from operations from the following: 3


Net Profit after tax and appropriations Rs. 1,00,000
Transfer to General Reserve Rs. 25,000
Proposed Dividend Rs. 15,000
Provision for Income Tax Rs. 10,000
Depreciation w/off Rs. 25,000
Profit on sale of Fixed Assets Rs. 10,000


(c) Write short notes on any two: (10)

1. Trading on Equity.
2. Operating Cycle.
3. MIS Report.
4. Limitations of Ratio Analysis.

March 2007

Management Accounting

Time: 3Hours                                                  Marks: 100
NB:
1. Questions No. 1 is compulsory and carries 20 marks.
2. Attempt any five from the rest questions,each carrying 16 marks
from remaining questions.
3. Working notes should form part of your answer.
4.Proper presentation and neatness is essential.
5. Use of simple calculator is allowed


Q.1.
Amruta Enterprises (having Installed capacity of 2, 00,000 units p.a.) produced 1,00,000 units in the financial year2006-2007. The cost - structure in 2006 - 2007 was as under: (20)
(a) Raw Materials 40%
(b) Wages 15%
(c) Factory Overheads 10%
(d) Administrative and Selling Overheads 15%
Total cost 80%
(e) Profit 20%
100


The selling price, which was Rs. 500 per unit in 2006-2007, is estimated to be fixed as at Rs. 600 per unit forthe year 2007-2008; and production and sale expected to increase by 40,000 units. It is, further, anticipated that raw materials cost per unit would increase by 10% due to price rise, whereas wage rate per unit would decrease by 20% due to automation, 56% of all the overheads are fixed and balance are variable.

As a Management Accountant you are required to prepare:-
(a) Cost statement for the year 2007-2008 and
(b) Statement showing estimated working capital required for the year 2007-2008 after considering the following additional information:
(a) Raw materials stock equivalent to two and half month’s consumption would be stored.
(b) Production time is one month. Raw materials are introduced at the beginning of the process, whereas wages and factory overheads accrue evenly during the production period.
(c) Two months stock of finished goods (valued at factory cost) would be carried in stock.
(d) 20% of raw materials would be imported from China and advance payment of two months would be made there against. 15% of indigenous raw materials requirement would be procured locally against immediate cash payment. Suppliers of balance of indigenous raw materials, allow a credit of one month.
(e) 50% of customers would enjoy a credit of one month, whereas balance 50% of customers would accept a bill of exchange payable after three months. These bills of exchange are immediately hypothecated with the bank against which overdraft facility would be available equal to 70% of amount of bills of exchange.
(f) Time - lag in payment of wages would be one month and for all overheads, it would be half month.
(g) The company would carry cash balance of Rs. 40,000 in its currency chest. Debtors are to be estimated at selling price.
(h) The activities are spread evenly throughout the year. Degree of completion of work-in-progress is 50%.


Q.2.
The Mismanagement Ltd. always finds that it is hard pressed for funds. In spite of borrowing funds at a high rate from Banks, they are not able to make payments to suppliers in time. The financial position of the company as reflected from the Balance Sheet for the last two years is as under: (16)


Particulars 2005 2006
-Rs. Lakhs Rs.Lakhs Rs. Lakhs Rs. Lakhs
Share Capital ----
(Rs. 10 each fully paid) 10.00 - 10.00 -
Profit and Loss A/c 1.65 11.65 0.45 10.45
Bank Overdraft - 1.55 - 5.95
Sundry Creditors- 1.00 - 6.00
--14.20 - 22.40
Land and Buildings - 3.00 - 5.00
Plant and Machinery 5.00 - 6.00-
Less: Depreciation 1.20 3.80 1.80 4.20
Motor Cars -1.00- 1.30
Less: Depreciation 0.40 0.60 0.60 0.70
Stock - 2.20 - 7.20
Debtors - 4.60 - 5.30
--14.20- 22.40


The following further information is available:
(a) Dividend was paid in 2006 at the rate of 10%.
(b) The company sold a motor car during 2006 for Rs. 8,000. This was purchased for Rs. 10,000 and its written down value in the books on 1-1-2006 was Rs. 5,000.
Prepare cash flow statement as per AS-3 by indirect method.

Q.3.
From the following particulars prepare a statement of sources and application of funds for the year ended 31-3-2006of M/s. Rimzim Ltd: (16)
(a) Rimzim Ltd. issued 1,000 shares of Rs. 120 each and all shares are subscribed and fully paid up.
(b) The company has redeemed preference shares for Rs. 1,00,000 at 10% premium. Premium was adjusted against securities premium.
(c) Investments are sold for Rs. 50,000 (resulting in profit of Rs. 10,000).
(d) Sale of machinery during the year Rs. 30,000 (resulting in loss of 5,000).
(e) Purchase of Fixed assets Rs. 1,20,000.
(f) Dividend paid Rs. 40,000 and income tax paid Rs. 35,000.
(g) Working capital of the company was Rs. 1,20,000 on 1-4-2005 and Rs. 1,80,000 on 31-3-2006.
(i) Depreciation provided for the year was Rs. 50,000 and preliminary expenses written off was Rs. 10,000.

Q.4.
Following balances from the books of Account CHETAN Ltd. for the year ended 31-12-2006 you are required to prepare vertical income statement and vertical Balance sheet: (16)


Particulars Amount Rs. Particulars Amount Rs.
Advertising 25,000 Sales Return 10,000
Interest Received 6,000 Bills Payable 43,000
Sales 12,00,000 10% Pref. Share Capital 1,50,000
Equity Share Capital 9,00,000 Debenture Interest 24,000
Salaries 1,80,000 Wages 1,85,000
Furniture and Fixture 2,00,000 Cash and Bank Balance 80,000
Outstanding Expenses 25,000 Debtors 2,00,000
P/L A/c (Credit. Balance) 1,30,000 Opening Stock 50,000
Bad Debts 5,000 General Reserve 75,000
Purchases 6,00,000 Creditors 1,00,000
Machinery 7,50,000 8% Debenture 4,00,000
Preliminary Expenses 10,000
Income Tax 10,000
Land and Building 7,00,000


Closing Stock on 31-12-2006 is Rs. 1,50 000.

Q.5.
Financial Position (16)

Liabilities 2005 Rs. 2006 Rs.
Equity Share Capital 2,00,000 2,50,000
10% Pref. Share Capital 2,00,000 1,50,000
Reserve Fund 80,000 1,00,000
Profit and Loss Account 1,00,000 1,50,000
12% Debentures 2,00,000 3,00,000
Creditors 1,00,000 1,20,000
Bank Overdraft 50,000 20,000
Assets --
Building 3,00,000 3,20,000
Machinery 1,50,000 1,80,000
Furniture 40,000 35,000
Investment 1,00,000 1,50,000
Stock 1,50,000 2,00,000
Debtors 1,00,000 1,20,000
Bank Balance 90,000 85,000


From the above information of Santhan Ltd. as at 31st March, 2005 and 2006 you are required to comment with the help of comparative statement, after rearranging in suitable form for analysis.

Q.6.
Following is the Profit and Loss A/c and Balance Sheet of Adhiraj Ltd. (16)


Profit and Loss A/c for the Year ended 31st December, 2006
Particulars Rs. Particulars Rs.
To Opening Stock 20,000 By Sales 4,50,000
To Purchases 2,00,000 By Closing Stock 80,000
To Wages 50,000 --
To Factory Expenses 70,000 - -
To G. P. c/d 1,90,000--
5,30,000 5,30,000
To Administrative Expenses 60,000 By Gross Profit b/d 1,90,000
To Selling Expenses 40,000 By Interest Received 5,000
To Interest on Loan- 5,000 -
To Debenture Interest 8,000--
To Net Profit 82,000 --
-1,95,000 - 1,95,000
To Tax Provision 20,000 By Net Profit 82,000
To Proposed Dividend 20,000 --
To Balance Profit 42,000 - -
- 82,000 82,000



Balance Sheet as on 31st December, 2006
Liabilities Amount Rs. Assets Amount Rs.
Equity Share Capital (Rs. 10) 2,00,000 Land and Building 1,75,000
9% Preference Share Capital 1,50,000 Machinery 1,50,000
8% Debenture 1,00,000 Furniture 1,00,000
Reserve50,000 Goodwill 50,000
P/L A/c 30,000 Patents 50,000
Short Term Loan 1,00,000 Vehicles 1,40,000
(Repaid within one year) Investment 50,000
Bank Overdraft 75,000 Stock 80,000
Sundry Creditors 1,40,000 Debtors 90,000
Bills Payable 30,000 Bills Receivable 30,000
Provision for Tax 20,000
Proposed Divided 20.000
- 9,15,000- 9,15,000


Q.7.
The following information are available for a firm for the year ended 31-12-2006: (16)
(a) Gross Profit Ratio - 25%
(b) Net Profit Ratio - 20%
(c) Stock Turnover Ratio - 10 times
(d) Net Profit/Capital - 1/5
(e) Capital/Other Liabilities - 1/2
(f) Fixed Assets/Capital - 5/4
(g)Fixed Assets/Current Assets - 5/7
(h)Fixed Assets - Rs. 5, 00,000

(i) Stock at the end Rs. 40,000 more than the stock, in the beginning.
Find Out:
(a) Cost of Goods Sold
(b) Gross Profit
(c) Net Profit
(d) Current Assets
(e) Capital
(f) Total Liabilities
(g) Closing Stock
(h) Total Assets

Q.8.
Calculate trend percentage from the following information extracted from financial statements of Perfect Ltd. afterarranging in vertical form and give your comments:(16)
(RS. '000)
Particular 2003
Rs.
2004 Rs. 2005 Rs. 2006 Rs.
Sales 50,000 60,000 70,000 90,000
Cost of Goods Sold 30,000 36,000 42,000 54,000
Operating Expenses 10,00 11,000 12,000 13,000
Income Tax 50% 50% 50% 50%
Fixed Assets 10,000 ? 15,000 ?
Net Worth ? 12,000 ? 16,000
Working Capital 5,000 5,500 6,000 6,500
Long Term Loans 5,000 6,000 7,000 8,000



Q.9.
(a) What is the impact of conversion of part of Debentures into equity shares on Debt-Equity Ratio which wasbefore conversion 1:1? (2)
(b) State the impact of cash sales Rs. 40,000 (Cost Rs. 25,000) on Quick Ratio and Current Ratio. (2)
(c) What is the impact of making adjustment of Interest Accrued on Debentures on Return on Capital Employed?(2)
(d) Write short notes on any two: (10)
(i) MIS Report.
(ii) Manipulation of Accounts.
(iii) Uses of Ratio Analysis.
(iv) Flow of Funds.

October 2006

Management Accounting

Time: 3Hours                                                  Marks: 100
NB:
1. Questions No. 1 is compulsory and carries 20 marks.
2. Attempt any five from the rest questions,each carrying 16 marks
from remaining questions.
3. Working notes should form part of your answer.
4.Proper presentation and neatness is essential.
5. Use of simple calculator is allowed


Q.1.
(a) The Balance Sheets of Dinesh Ltd. are as follows: (20)

Balance sheet as at 31st March, 2005 and 2006.
Liabilities 2005 2006 Assets 2005 2006
-Rs. Rs.- Rs. Rs.
Equity share capital 3,00,000 5,00,000 Goodwill 1,10,000 90,000
General Reserve - 60,000 Land and Building 1,60,000 1,80,000
Profit and Loss A/c - 58,000 Plant and Machinery 80,000 2,00,000
Debentures 2,00,000 - Stock 84,000 1,06,000
Sundry Creditors 1,14,000 92,000 Debtors 1,80,000 1,56,000
Bills Payable 60,000 12,000 Advance Income Tax - 40,000
Provision for Income Tax - 50,00 Bills Receivable 16,000 24,000
Proposed Dividend - 40,000 Prepaid Expenses 12,000 8,000
--- Cash in Hand 20,000 8,000
--- Profit and Loss A/c 12,000 -
-6,74,000 8,12,000 - 6,74,000 8,12,000



Additional Information:
During the year ended 31-03-2006. Depreciation of Rs. 16,000 and Rs. 20,000 have been charged on Land and Building and Plant and Machinery respectively.
An Interim Dividend of Rs. 15,000 was paid during the year ended on 31-03-2006.
During the year Machinery having book-value of Rs. 16,000 was sold for Rs. 14,000.
Prepare cash flow statements by Indirect Method for the year ended 31st March, 2006 as per AS - 3.


Q.2.
Aman and Ram are partners of M/S Aman Ram sharing Profits and Losses in the ratio of 3:2. Their Balance sheet as on 31st March, 2004 was as under: (16)

Balance sheet as at 31st March, 2005 and 2006.
Liabilities Rs. Rs. Assets Rs. Rs.
Creditors -15,000 Bank- 14,000
Reserves - 10,000 Cash - 3,000
Loan from Sanju- 20,000 Debtors 29,000 -
Capitals: --Less: RDD 1,000 28,000
Aman 30,000- Stock - 30,000
Ram 25,000 55,000 Fixed Assets: --
---Cost 35,000
--- Less: Depreciation 10,000 25,000
--1,00,000 -- 1,00,000


As they wanted to go in for heavy expansion they decided upon the following, during the year ended 31st March, 2005:
Introduce fresh capital of Rs 20,000; Rs. 5,000 being by Aman and Rs. 20,000 being by Ram.
Admit Sanju as a partner on the following terms:
(a) Aman, Ram and Sanju are to share profits and losses in the ratio of 2:2:1.

(b)Goodwill of the firm is worth Rs. 30,000 but it is privately settled by the partners without bringing it into the books of account of the firm.

(c)Sanju's loan is to be converted into his capital.

(d)Sanju is to bring in a further sum of Rs. 26,000.

M/s Aman purchased on 1st April, 2004 new fixed assets of Rs. 80,000. They sold part of the fixed assets costing Rs. 20,000 on which depreciation provision was Rs. 8,000 for Rs. 10,000. This amount was used to partially finance the purchase of fixed assets. M/s Aman Ram borrowed Rs. 50,000 from Bank of India for the purpose of financing the purchase of fixed assets. Out of this loan Rs. 10,000 was repaid during the year.
Aman, Ram and Sanju withdrew Rs. 16,000, Rs. 15,000 and Rs. 10,000 respectively during the year. You are further informed that the partnership firm tax of Rs. 2,000 was paid during the year. Balance Sheet of the firm as on 31st March, 2005 was as under:

Liabilities Rs. Rs. Assets Rs. Rs.
Creditors - 30,000 Bank - 6,000
Loan from Bank of India - 40,000 Cash - 6,000
Capitals: -- Debtors 60,000-
Aman 39,000 - Less: RDD 3,000 57,000
Ram 48,000 - Stock - 50,000
Sanju 43,000 1,30,000 Fixed Assets:- -
- -- Cost 95,000 -
--- Less: Depreciation 14,000 81,000
- - 2,00,000-- 2,00,000


Prepare a statement showing flow of fund during the year ended 31st March. 2005 along with statement of changes in working capital, together with item wise changes in working capital.


Q.3.
While preparing the financial statements for the year ended 31-3-2005 of XYZ Ltd., it was discovered that a substantial portion of the records were missing. However, the accountant was able to gather the following data: (16)

Liabilities Rs. Rs. Assets Rs. Rs.
Paid-up Share Capital -- Land -3,60,000
60,000 Equity shares of Rs. 10 -6,00,000 Plant and Machinery:- -
each)-- Cost 9,00,000 -
Reserves and Surplus: -- (-) Depreciation 3,60,000 5,40,000
Balance on 1-4-04 1,80,000 - Current Assets: - -
+ Transfer during the year 1,20,000 3,00,000 Stock ? -
10% Loan - 6,00,000 Debtors ?-
Current Liabilities: -- Cash and Bank ? -
Proposed Dividend ? ----
Provision for Tax ? ----
Creditors ? 6,00,000 -- -
-Total ? -Total ?


The following other information is available:

Current Ratio 2:1
Cash and Bank 30% of Total Current Assets
Debtors Turnover (Sales/Debtors) 12 Times
Stock Turnover (Cost of Goods Sold/Stock) 12 Times
Creditors Turnover (Cost of goods Sold/Creditors) 12 Times
Gross Profit Ratio on Sales 25%
Proposed Dividend 20%


You are required to complete the Balance Sheet as on 31-03-2005 with available information, working notes shall form part of your answer.

Q.4.
From the following Balance Sheet, prepare Vertical balance sheet which is suitable for analysis and calculate TrendPercentages taking 2003 as base year and comment on it. (16)


Balance Sheets as at 31st December
Particular 2005 Rs. 2004 Rs. 2003 Rs.
Share Capital 50,000 50,000 50,000
Reserve and Surplus 5,000 10,000 10,000
Secured Loan 3,00 5,000 5,000
Unsecured Loan 2,000 - 6,000
Current liabilities 5,000 5,000 4,000
-65,000 70,000 75,000
Particular 2005 Rs. 2004 Rs. 2003 Rs.
Fixed Assets (Net) 40,000 45,000 50,000
Investment 5,000 7,500 10,000
Stock 7,000 6,000 5,000
Debtors 10,000 9,000 7,000
Cash 3,000 2,500 3,000
- 65,000 70,000 75,000


Q.5.
From the information giver, below prepare Balance sheet in a vertical form, suitable for analysis and calculate the following ratios: (16)
1. Capital Gearing Ratio.
2. ProDrietory Ratio.
3. Current Ratio.
4. Liquid Ratio.
5. Stock of Working Capital.
Particulars (Rs.) Particulars (Rs.)
Cash at Bank 12,500 Land and Building 2,00,000
Expenses paid in Advance 15,500 Stock 68,250
Creditors 1,01,500 Debtors 1,30,750
Bills Receivable 5,250 Plant and Machinery 1,36,000
12% Debentures 62,500 Loan from Director 1,00,000
Equity Share Capital 2,50,000 (Repayable after three years) -
P & L A/c (Cr.) 54,250 --


Q.6.
The following are the Balancesheets of Hayat Ltd. for the year ending 31st March, 2004 and 2005. (16)

Liabilities 31-3-04 Rs. 31-3-05 Rs. Assets 31-3-04 Rs. 31-3-05 Rs.
Equity share capital 4,00,000 4,00,000 Fixed assets less depreciation 4,80,000 9,20,000
Preference share capital 2,00,000 2,00,000 Stock 80,000 40,000
Reserves 40,000 60,000 Debtors 2,00,000 1,50,000
Profit and loss account 30,000 40,000 Bills receivable 40,000 60,000
Bank overdraft 1,00,000 4,60,000 Prepaid expenses 20,000 24,000
Creditors 80,000 1,00,000 Cash at bank 1,00,000 1,66,000
Provision for taxation 40,000 50,000 -- -
Proposed Dividend 30,000 50,000-- -
-9,20,000 13,60,000- 9,20,000 13,60,000


From the above prepare Vertical Balance Sheet suitable for analysis and do Horizontal comparison showing absolute Increase/Decrease and Percentage.

Q.7.
(a) On the morning of 31st December, 2005, the business had stock costing Rs. 50,000, Debtors Rs. 1,70,000, creditors Rs. 1,90,000 and cash at Bank Rs. 50,000. On that day the business has the following transactions: (16)
Purchased goods for cash Rs. 5,000 and credit Rs. 20,000.
Sale of Goods for cash Rs. 25,000 (cost of Goods Sold Rs. 20,000).
Collection from Debtors Rs. 45,000.
Paid Rent for Jan. and Feb. 2006 in advance Rs. 20,000.
Payments to creditors Rs. 1,00,000.
All receipts and payments are by cheques.
You are required to compute on the morning and evening of 31st December, 2005,

(i) Current Ratio.
(ii)Acid Test Ratio.

(b) Stock Turnover of X Ltd. is 8 times. (4)
Sales for the year are Rs. 5,00,000 and Gross Profit Ratio is 25% on cost.
Closing Stock is Rs. 10,000 more than Opening Stock
Find out closing stock.

Q.8.
A company plans to manufacture and sell 400 units of domestic appliances per month at price of Rs. 600 each forthe calendar year 2007. The ratio of cost of selling price are as follows: (16)

particulars % of selling price
Raw material 30
Packing material 20
Direct lab our 15
Direct expenses 5


Fixed overhead are estimated at Rs. 4,32,000 per annum.

Stock were maintained as per following.
Raw material 30 days
Packing material 15 days
Work in progress 7 days
Finished goods 200 Units


Following additional information is given:
Credit sales represent 80% and customers enjoy 30 working days credit. Balance 20% are cash sales.
Creditors allow 21 working days credit for payment.
Lag in payment in overhead and expenses is 15 working days.
Cash requirements to be 12% of net working capital excluding cash.
Working days in a year are taken as 300.
Prepare working capital requirement for the year 2007.


Q.9.
Write short notes on any four: (16)
(a) Classification Assets.
(b) Drawbacks of comparative statements in Interpretation of final accounts.
(c) Selection of Accounting Software.
(d) MIS.
(e) Explain "Fund" and "Flow of Funds".
(f) Consequences of Inadequate working capital.

April 2006

Management Accounting
Time: 3 Hours
Marks: 100
NB:
  1. Questions No. 1 is compulsory and carries 20 marks.
  2. Attempt any five questions, each carrying 16 marks from remaining questions.
  3. Working notes should form part of your answer.
  4. Proper presentation and neatness is essential.

Q.1 M/s. Rajesh & Co. gives you the following information. Prepare trading and profit and loss account for the year ended 31st March, 2004 and balance sheet as on that date in as much detail as is possible._______(20M)

Opening Stock

Rs. 90,000

Stock Turnover Ratio

10 times

Net Profit Ratio on Turnover

15%

Gross Profit Ratio on Turnover

20%

Current Ratio

4: 1

Long Term Loan

Rs. 2, 00,000

Depreciation on Fixed Assets @ 10

Rs. 20,000

Closing Stock

Rs, 1, 02,000

Credit period allowed by suppliers

One month

Average Debt collection period

Two months


On 31st March, 2004 current Assets consisted of stock, debtors and cash only. There was no bank overdraft. All purchases were made on credit. Cash sales were 1/3rd of credit sales.

Q 2. From the following Balance Sheet and information of TNG Ltd., prepare fund flow statement and schedule of item wise changes in working capital for the year ended 31-12-2005 :- (16)

Balance Sheet
Liabilities 2004 Rs. 2005 Rs. Assets 2004 Rs. 2005 Rs.
Equity Share Capital 40,000 70,000 Land 80,000 80,000
P & L A/c 13,420 16,000 Buildings 40,000 36,000
General Reserve 13,180 14,200 Furniture 5,000 7,000
Long Term Loan 16,400 14,000 Debtors 12,200 16,600
Creditors 36,720 17,000 Bills Receivable 2,000 13,000
Bills Payable 15,100 5,800 Goodwill 19,000 16,000
Prov. for Tax 9,000 12,000 Cash 620 5,400
Proposed Dividend 15,000 25,000
1, 58,820 1,74,000 1, 58,820 1,74,000


Additional Information:
Additional land was purchased during the year at a cost of Rs. 1, 20,000 and later on sold at a profit of Rs. 20,000 during the year.
Furniture having book value of Rs. 2,000 was sold for Rs. 1,000.
An interim dividend of Rs. 5,000/- was paid during the year.
Income Tax paid Rs. 8,500/ .
Charged depreciation on Building Rs. 4,000 and Furniture Rs. 300/.
Proposed dividend for last year has been paid during the year.


Q 3. Following are summarized Balance Sheets of BDM Ltd. as on 31st Dec., 2004 Balance Sheet 2005. (16)

Balance Sheet
Liabilities 2004Rs. 2005Rs. Assets 2004Rs. 200 Rs.
Equity Share Capital 2,00,000 2,50,000 Bank 35,000 16,000
12% Debentures 1,00,000 80,000 Stock 40,000 75,000
10% Preference Share Capital 50,000 80,000 Debtors 90,000 1,50,000
Bank Loan 70,000 1,10,000 Machinery 75,000 60,000
Reserves 20,000 25,000 Furniture 10,000 8,000
P & L A/c 50,000 60,000 Land 1,70,000 2,80,000
Creditors 60,000 75,000 Buildings 1,40,000 99,000
Bills Payable 40,000 33,000 Goodwill 30,000 25,000
5,90,000 7,13,000 5,90,000 7,13,000


Additional Information:
1. Depreciation charged during 2005 was Rs. 4,000/- on Furniture. Rs. 12,000/- on Machinery and Rs. 20,000/- on Buildings.
2. Part of Machinery was sold for Rs. 15,000/- at a loss of Rs. 4,000/.
3. During 2005 interim dividend was paid Rs. 10,000 & Income Tax was paid Rs. 5,000/-
4. During the year part of the Building was sold at book-value.
You are required to prepare Cash Flow Statement as per AS. 3 (Use Indirect method).

Q 4. Re-write the following statement of changes in working capital by calculating the missing figures: - (16)



Statement of Changes in working capital
Particulars 31-12-2004 31-12-2005 Working Capital increase/ (Decrease)
(A) Current Assets
Stock 1, 00,000 ? 20,000
Debtors ? 70,000 ?
Cash 10,000 15,000 ?
Bank 25,000 ? 25,000
Bills Receivables 30,000 25,000 ?
Prepaid Expenses 5,000 ? 1000
(A) ? ? -
(B) Current Liabilities
Creditors 20,000 ? (10,000)
Bills Payable 10,000 5,000 ?
Outstanding Wages 3,000 ? 1,000
Outstanding Salary ? 4,000 ?
(B) 40,000 ? -
Working Capital (A-B) ? ? -
Increase in working capital 35,000
60,000



Q.5 A & B carrying on partnership business. Their position as on 31st March 2005, 2004& 2003 is as follows: (16)

(i) Balance sheets as at 31st March :
(Rs. in lacs)
Assets 2005 2004 2003
Fixed Assets (at cost less Depreciation) 30.00 25.00 24.00
Investment 2.00 1.00 2.00
Stock in Trade 12.00 10.00 8.00
Accounts Receivable 18.00 15.00 12.00
Loans & Advances 8.00 8.00 6.00
Cash & Bank Balances 1.00 1.00 1.00
71.00 60.00 53.00
Liabilities
Partners' Capital Accounts 35.00 30.00 25.00
Partner's Current Accounts 6.00 4.00 4.00
Bank Loans 8.00 6.00 6.00
Sundry Creditors 22.00 20.00 18.00
71.00 60.00 53.00

(ii) Summarised Income Statements for the year ended 31st March :
(Rs. in lacs)
Particulars 2005 2004 2003
Net Sales 240.00 220.00 200.00
Less : Cost of Sales 180.00 170.00 150.00
Gross Margin 60.00 50.00 50.00
Less : Operating Expences 50.00 40.00 36.00
Net Profit before Tax 10.00 10.00 14.00

Prepare Trend Analysis Statement taking earliest year as the base. Writing Balance Sheet in vertical form suitable for analysis in Trend Statement is necessary.


Q. 6 Following financial statement for the year ended 31st March, 2005 are submitted to you by the accountant of Star Ltd. (16)

Trading and Profit and Loss Account for the Year ended 31st March, 2005
Particulars Rs. Particulars Rs.
To Opening Stock 70,000 By Sales 16,60,000
To Purchases 15,30,000 By Closing Stock 1,60,000
( - ) Returns 30,000 15,00,000
To Gross Profit 2,50,000
18,20,000 18,20,000
To Depreciation 36,000 By Gross Profit 2,50,000
To Administration Expenses 50,000 By Interest 10,000
To Selling & Distribution Expenses 24,000
To Provision for Income-tax 40,000
To Proposed Dividend 16,000
To Profit Balance 94,000
2,60,000 2,60,000


Balance Sheet as at 31st March, 2005
Liabilities Amount Rs. Assets Amount Rs.
Share Capital 3,00,000 Goodwill 20,000
Profit and Loss Account 1,80,000 Cash in Hand 8,000
Proposed Dividend 16,000 Stock in Trade 1,60,000
Bank Overdraft 38,000 Sundry Debtors 1,78,500
Sundry Creditors 26,000 Land & Building 92,150
Provision for Depreciation 55,750 Plant & Machinery 1,28,600
Provision for Tax 40,000 Prepaid Expenses 1,500
Expenses on Issue of Shares 7,000
Short Term Investments 60,000
6,55,7500 6,55,750


Rearrange the above statements in a form suitable for analysis and determine Net Worth, Quick Assets, Quick Liabilities, Operating Profit and Retained Earnings.


Q.7 From the following Profit and Loss Account information for year ending 2004 and 2005 prepare Common Size statement. Arrange information in Vertical Form suitable for analysis. (16)
2004 Rs. 2005 Rs.
Sales 10, 00,000 15, 00,000
Closing Stock 2, 50,000 3, 00,000
Opening Stock 1, 50,000 2, 50,000
Purchases 3, 00,000 4, 50,000
Wages 2, 00,000 3, 00,000
Manufacturing Expenses 1, 00,000 1, 50,000
Administrative Expenses 50,000 50,000
Selling & Distribution Expenses 50,000 75,000
Loss on Sale of Furniture 25,000 0
Interest on Debenturess 10,000 10,000
Profit on Sale of Shares 50,000 0


(i) Stock at the end Rs. 40,000 more than the stock, in the beginning.
Find Out:
(a) Cost of Goods Sold
(b) Gross Profit
(c) Net Profit
(d) Current Assets
(e) Capital
(f) Total Liabilities
(g) Closing Stock
(h) Total Assets

Q.8 From the following data provided by M/s Alpha Ltd. showing working capital requirements for the year ended 31st March, 2006: (16)
(a) Estimated activity/operations for the year 2, 60,000 units (52 weeks).
(b) Raw material remains in stock for 2 weeks and production cycle takes 2 weeks.
(c) Finished Goods remaining in stock for 2 weeks.
(d) 2 weeks credit is allowed by suppliers.
(e) 4 weeks credit is allowed to Debtors.
(f) Time lag in payment of wages and overheads is 2 weeks each.
(g) Cash & Bank Balance to be maintained Rs. 25,000.
(h) Selling price per unit is Rs. 15.
(i) Analysis of cost per unit as follows:-
(1) aterial 331/3% of sales.
(2) Labour and overheads in the ratio of 6 : 4 per unit
(3) Profit is at Rs. 5 per unit.
Assume that operations are evenly spread throughout the year; Wages and Overheads accrue similarly. Manufacturing process requires feeding of material fully at the beginning. Degree of work-in-progress is 50%. Debtors are to be estimated at selling Price.


Q.9 Write short notes on any four: (16)
(a)Window dressing of current ratio.
(b)Uses of ratio.
(c)Cash from operating activities.
(d) MIS report.
(e) Limitation of financial statmentsts.
(f) Cost of goods sold.

October 2005

Management Accounting
October 2005

Time: 3Hours                                       Marks: 100
NB:
1. Questions No. 1 is compulsory and carries 20 marks.
2. Attempt any five from the rest questions,each carrying 16 marks
from remaining questions.
3. Working notes should form part of your answer.
4.Proper presentation and neatness is essential.
5. Use of simple calculator is allowed