NJR/KS/18/6738

Master of Business Administration (M.B.A.) Semester—I (C.B.C.S.) Examination

ACCOUNTING FOR MANAGERS
Compulsory Paper—3
Time : Three Hours] [Maximum Marks : 80
N.B. :— (1) ALL questions are compulsory.
(2) All questions carry equal marks (16 marks each).
1. (A) Explain the concepts and conventions of Accounting.
OR
(B) State the meaning of Financial Accounting and briefly discuss the accounting process.
2. (A) Differentiate between Profit and Loss Statement and Balance Sheet.
OR
(B) The Trial Balance for the year ended 31.03.2015 of XYZ Ltd. is as follows :
Particulars (`) Particulars (`)
Purchases 81,900 Share Capital
Patents 20,000 (called-up & fully paid)
Audit Fees 8,500 3,000 Equity Shares 3,00,000
Salary 19,800 1,000 Preference Shares 1,00,000
Furniture 1,50,000 Interest Received 8,200
Bills Receivable 56,800 Sales 3,40,000
Buildings 2,41,400 General Reserve 60,000
Cash-in-hand 9,000 Returns Outward 2,100
Investments 60,000 Profit & Loss Balance
Repairs 3,000 (as on 1-4-2014) 29,900
Stock (01-04-2014) 9,750 Investment Fluctuation
Electric Power 4,600 Fund 20,000
Office Rent 11,100 Fixed Deposit 16,600
Interest on 7% Debentures 5,000 7% Debentures 1,00,000
Wages 37,500 Bills Payable 23,200
Cash-at-bank 17,000
Insurance 4,800
Plant and Equipments 2,50,000
Loose Tools 7,500
Carriage Inwards 2,350
10,00,000 10,00,000

RQA—32382 1 (Contd.)
 You are required to consider the following additional information :
(a) Transfer ` 19,900/- to General Reserve.
(b) Depreciate Furniture @ 10% p.a.
(c) Closing Stock ` 11,900/-.
(d) Provide ` 30,500/- for taxes.
Prepare a Statement of Profit & Loss for the year ended 31st March, 2015 and a Balance
Sheet as on that date as per the revised Schedule VI to the Companies Act, 2013.
3. (A) From the following Balance Sheet of Pragati Ltd. as at 31.3.2013 and 31.3.2012. Prepare
a Cash Flow Statement :
Particulars Note 31.3.2013 31.3.2012
No.
I. Equity and Liabilities :
(1) Shareholders Fund :
(a) Share Capital 1,05,000 75,000
(b) Reserves and Surplus 1 85,000 50,000
(2) Current Liabilities :
(a) Short-term borrowings 2 25,000 15,000
(b) Trade Payables 3 22,000 17,400
Total 2,37,000 1,57,400
II. Assets :
(1) Non-current Assets :
(a) Fixed Tangible Assets 1,66,000 93,400
(2) Current Assets :
(a) Inventories 27,000 24,000
(b) Trade Receivables 39,000 36,000
(c) Cash & Cash Equivalents 5,000 4,000
Total 2,37,000 1,57,400
Notes :
31.3.2013 31.3.2012
(1) Reserves and Surplus :
General Reserve 55,000 30,000
Bal. of Statement of P & L 30,000 20,000
85,000 50,000

RQA—32382 2 NJR/KS/18/6738
 (2) Short-term Borrowings :

Bank Overdraft 25,000 15,000

(3) Trade Payables :

Sundry Creditors 20,000 14,000

Bills Payable 2,000 3,400

22,000 17,400

(4) Trade Receivables :

Sundry Debtors 36,000 36,000

Bills Receivable 3,000 —

39,000 36,000

Additional Information :

(1) Depreciation charged on fixed tangible assets for the year 2012-13 was Rs. 20,000/-

(2) Income tax Rs. 5,000 has been paid during the year.

OR

(B) The firm has owner’s equity of Rs. 1,00,000. The ratio for the firms are as follows :

Short term debt to total debts : 0.4

Total debt to owners equity : 0.6

Fixed assets to owner’s equity : 0.6

Total assets turnover ratio (cost of goods sold/total assets) : 2 times

Inventory turnover ratio (cost of goods sold/closing stock) : 8 times

You are required to compute :

(1) Total debts

(2) Short term debts

(3) Long term debts

(4) Fixed assets

(5) Total assets

(6) Cost of goods sold

(7) Closing stock

(8) Cash balance.

RQA—32382 3 NJR/KS/18/6738
4. (A) From the following forecast of income and expenditure prepare a Cash Budget for the three
months commencing from 1st June 2014, when the bank balance was Rs. 1,00,000/- :
Month Sales Purchases Wages Factory OH Admin. OH
April 80,000 41,000 5,600 3,900 10,000
May 76,500 40,500 5,400 4,200 14,000
June 78,500 38,500 5,400 5,100 15,000
July 90,000 37,000 4,800 5,100 17,000
August 95,000 35,000 4,700 6,000 13,000
Additional Information :
(1) A sales commission of 5% on sales, due two months after sales is payable.
(2) Plant valued at Rs. 65,000 will be purchased and paid for in August.
(3) Dividend for the last financial year of Rs. 15,000 will be paid in July.
(4) There is a two months credit period allowed to customers and received from suppliers.
(5) Lag in payment of wages and overheads is one month.
OR
(B) A company working at 50% capacity manufacturers 10000 units of a product. At 50%
capacity the product cost is Rs. 180 and sale price is Rs. 200. The break up of the cost is
as below :
Cost per unit
Material Rs. 100
Wages Rs. 30
Factory Rs. 30 (40% fixed)
Administration overheads Rs. 20 (50% fixed)
At 60% working raw material cost goes up by 2% and sales price falls by 2%. At 80%
working the raw material cost increases by 5% and sale price decreases by same percentage
i.e., 5%.
Prepare a statement to show profitability at 60% and 80% capacity.
5. (A) Differentiate capital expenditure from revenue expenditure.
(B) What is Balance Sheet ?
(C) State the purpose of cash flow statement.
(D) What is Master Budget ?

RQA—32382 4 NJR/KS/18/6738