SRinivas isstiTuTE oF tecHNOLos, | HREGRY ABANEALURS Page No... 1 : NEW SCHEME / Reg. No. | First Semester M.B.A Degree Examination ~ December 2005/January 2006 Master of Business Administration = Accounting For Managers. Time: 3 hrs.) (Mox.Marks : 100 Note: 1. Answer any FOUR full questions from 1-7. : 2. Question No. 8 is compulsory. 43. Show working notes wherever necessary. 1. (@ What are the branches of accounting? @ Marks) (b) Joumaiise the following transactions in the books of Vishwanath. ) Vishwanath started his business with the following Cash in hand 1800 Cash at bank 3600 Goods inhand 3000 Fumiture 2000 Buildings 10,000 i) Gave charity Rs. 20 ji) Loan taken from the bank Rs.6000 'v)_ Purchased a motor car in exchange for goods fs.2000 and cheque s.3000 v) Paid proprietor’s life insurance premium Rs.100 vi) Bought goods from Lakshman on account s.2000 vil) Furniture costing Rs.300 was destroyed by fire Rs.10. 7 Marks) (©) A firm purchased the plant and machinery on Ist July 1995 for Rs.90,000 and ; incurred Rs.10,000 on its erection expenses on 30th June 1998, part of plant and machinery purchased on Ist July 1998 for Rs. 50,000 sold for Rs.30,000. Depreciation is written off at 10%. The firm closes its books on 31st December each year. Prepare plant and machinery account and depreciation account under straight line dep, method, (10 Marks) 2. (@) Differentiate between accruals and outstanding? (Marks) (®) Wiite the proforma of Invoice book, purchase book and sales book, with imaginary transactions for the books. (7 Marks) (©) Define the term standard, What are the major benefits of accounting standarcl? In what way accounting standards are useful to extemal users, preparers, auditors and managers? (10 Marks) Contd... 2G5SMBAI4 1 proper valuation of inventory important? (@ Marks) Page No. 2 3. (a) Define inventory. Why i (©) Distinguish between tia! balance ane batance sneet F Macks) (e) Prepare a trial bolance from the following balances of the year ending 2002 Copital 28,000 Purchases 15,000 Stock of goods 4,000 Plant 18,000 Motor car 8,000 Furniture 5,000 Discount received 400» Wages 8,200 Bad-debis 400. Creditors 6,500 Sales 40,000 Salaries 2,800 Cash-at-bonk 4,000 Commission (cr) 600 Return inwards 2,000 Returns ouhwards 1,000 Cash in hand 600 Debtors 5,600 Rent 3,600 General exp. 300 Discount allowed 300 Interest received 200 Carriage 1,800 Advertisement 500 4, (a) What Is fund flow statement? (b) Define preference share. Explain the types of preference shares, (©) Record the following trensactions in a two-column cash book (discount and cash column) and post them into ledger. (10 Marks) 2004 Feb 1 Commenced business with cash Rs.10,000 6 Received a cheque for Rs.5000 for goods sold 7 Issued a cheque for Rs.500 for furniture purchased 8 — Purchased goods for Rs.3000 and paid by cheque 8 Received a cheque for Rs 490 in settlement of Rs.600 on account 10 Paid into bank of India Rs.5000 from Rangan 18 Paid wages in cash Rs.200 18 Drew a cheque for personal use 3.400 25 Drew for office use Rs.260 27 Paid electric charges in cash Rs.15 28 Poidl salaries by cheque. 5. (@) What are the important balance sheet ratios? @ Marks) (b) Define auait report. Explain how audit report is different from Directors report. (7 Marks) (©) Explain the different accounting concepts and conventions. Go marks) 6. @) The financial manager of XYZ Ltd. expects that its earnings before interest and taxes (EBIT) in the current year would amount to Rs.10,000. The firm has 5% bonds ‘aggregating Rs.20,000 while the 10% preference shares amount fo Rs,20,000. What would be the earings per share (EPS) after considering 35% tax rate and the number of outstanding shares 1,000, « Marks) Contd... 3SAMMI. bite Henoneuiag OR Page No. 3 (©) Following are the B/S of a company as on 31st Dec 02 and 2003, abilities _2002| 2003 | Assets 2002 | Share capitol 1,39,000 | 1,48,000 | Cash in hand 18,000 | 15,600 Share premium 1000 3.000 | Trade debtors 27.800 36.400 24,000 | 12,000 | Stock-in-trade, 8.200 | 85,400 Debentures Trade creditors 20,000 | 23,680 | Land 40,000 | 60,000 Provision for | Good wil 20,000 | 10,000 2o.800| 21,120 | 2.06, a 2,06,400 206,200 | 2,06.400 || = ‘Adaiitional information : | | doubtful debt | 1.200 | 1.600 Profit and loss a/c | 1) Dividend was paid totaling Rs.7000 1 Land was purchased for Rs.20,000 and the amount provided for amortisation of goodwill totalled Rs, 10,000 i) Debenture loan was repaid Rs.12,000 You are requited to prepare fund flow statement and statement of changes in working capital (15 Marks) 7. (@) Give the meaning of window atessing, Provide any five examples by which a firm can resort to window dressing. (§ Marks) (b) Using the following accounting variables, construct the balance sheet Gross profit (20% of sales) 60,000 Shareholders equity 50,000 Credit sales to total sales 80% Total assets turnover 3 times Stock turnover 8 times Average collection period (360 days in a year) 18 days Current ratio 16:1 Long term debt to equity 40% (15 Marks) Contd... 4