Beruflich Dokumente
Kultur Dokumente
ACCOUNTING
PARTA
(Answer Question No.l which is compulsory and
any two of the rest from this part.)
(3 marks)
(b) Can a company pay dividend out of current profits without
making good past losses ?
(3 marks)
(c) Precision Ltd. proposed to purchase the business carried on
by Fastners Pvt. Ltd. The goodwill for this purpose is agreed
to be valued at five years' purchase of the weighted average
profit for the past four years (Use appropriate weights). Profits
for the past four years are as follows :
Year Profit
(Rs.)
1999-2000 2,52,500
2000-2001 3,10,000
2001-2002 2,50,000
2002-2003 3,50,000
Liabilities Assets
Share capital: Fixed assets 97.50
14% Preference share Investments 18.00
capital of Rs. 100 22.50 Current
each Assets 15.00
Equity shares of Rs.10
Each 45.00
General reserve 27.00
15% Debentures 21.00
Current liabilities 15.00
130.50 130.50
Ankit Industries Ltd. agreed to takeover the assets and liabilities
of Agile Industries Ltd. on the following terms and conditions :
(i) Discharge of 15% debentures at a premium of 10%
by issuing 15% debentures in Ankit Industries Ltd.
Fixed assets 10% above the book value.
Investments at par value.
Current assets at a discount of 10%.
Current liabilities at book value.
(ii) Discharge the debentureholders of Agile
Industries Ltd. at 10% premium by issuing 15%
debentures of Ankit Industries Ltd.
Preference shareholders are discharged at a premium
of 10% by issuing 15% preference shares of Rs.100.
Issue 3 equity shares of Rs.10 each for every 2
equity shares in Ankit Industries Ltd. and pay
cash @ Rs. 3 per equity shares.
Calculate purchase consideration under 'net assets method';
and 'net payment method'.
(5 marks)
(c) The following information is extracted from the books of
Reliable Electricity Co. Ltd. for the year ended 31sl March,
2003 :
Rs.
Net profit before charging debenture interest 22,50,050
10% Debentures interest paid during the year 3,75,000
Capital base arrived at by the company 1,03,63,000
Reasonable return calculated by the company 13,56,150
You are required to indicate the disposal of surplus of the
company.
(4 marks)
PARTB
(Answer Question No.5 which is compulsory
and any two of the rest from this part.)
(a) "Ordering costs and carrying costs are equal at EOQ level."
Comment.
(4 marks)
(b) A factory is currently working at 50% of its working capacity
and produces 10,000 units. At 60% working capacity, the
raw materials cost increases by 2% and selling price falls by 2%.
At 80% working capacity, raw material cost increases by 5%
and selling price falls by 5%.
At 50% working capacity, the product costs Rs.180 per unit
and sold at Rs.200 per unit. The cost of Rs.180 is made up
as follows :
Rs.
Materials 100
Labour 30
Factory overhead (40% fixed) 30
Administration overhead (50% fixed) 20
180
You are required to estimate the profits of the factory when
it works at 60% and 80% of its working capacity.
(4 marks)
(c) State any four objectives of financial statement analysis.
(4 marks)
(d) State, with reasons, whether the following statements are
correct or incorrect :
(i) Notional costs and imputed costs mean the same thing.
(ii) Conversion costs and overheads are interchangeable terms.
(4 marks)
(e) Find out the profit as per financial records, from the following
data :
Rs.
(i) Profit as per cost records 70,500
(ii) Undervaluation of closing stock in
cost records 10,500
(iii) Administration overheads under-
recovered in cost records 5,200
(iv) Bad debts and preliminary expenses
written off in financial accounts only 7,345
(v) Depreciation overcharged in cost records 3,445
(4 marks)
6. (a) An analysis of Matrix Ltd. reveals the following information
:
Variable Cost Fixed Cost
(% of Sales) (Rs.)
Direct materials 32.8
Direct labour 28.4
Factory overheads 12.6 1,89,900
Distribution overheads 4.1 58,400
General administration overheads 1.1 66,700
50,000 50,000
Balance Sheet as on 31s ' March, 2003 (Rs. in '000)
Liabilities Assets
(Rs. capital of
Share Land and buildings 50,000
Rs. 10 each 1,00,000 Plant and machinery 30,000
Profit and loss a/c 20,000 Stock 15,000
Creditors 25,000 Sundry debtors 15,000
Bills payable 15,000 Bills receivable 12,500
Cash and bank
balances 37,500
1,60,000 1,60,000
Standard Actual
Number of units 4,000 3,800
Fixed overhead (Rs.) 40,000 39,000
Working days 20 21
(3 marks)