Financial and Management Accounting

Fall 2012 Master of Business Administration- MBA Semester 1 MB0041 – Financial And Management Accounting – 4 Credits (Book ID: B1624) Assignment Set – 1 (60 Marks) Note: Each question carries 10 Marks. Answer all the questions. 1. Explain the process involved in accounting. 2. The salaries paid in 2004 is Rs. 5,00,000; Salaries outstanding is Rs. 20,000; Salaries paid in advance for 2004 is Rs. 30,000. What is the actual salary expenditure for 2004? Which accounting principle is involved in this and explain that principle. 3. Find the value of the following: a.If the total assets are Rs. 87,000 and the liabilities are Rs. 47,000, find out the amount of capital. b. If the capital of proprietor is Rs. 4,00,000 and the total assets are Rs. 6,00,000, what is the amount of liabilities to outsiders? c. If creditors are Rs. 56,000, bank overdraft is Rs. 1,00,000, and outstanding expenses are Rs. 8,000, what is the total amount of assets? d. Fixed assets are Rs. 70,000 a nd current assets are Rs. 1,00,000 and the creditors are Rs. 30,000. What is capital? 4. Enter the following transactions in the single column cash book of Gopichand.March, 2003 1st. Commenced business with cash 20000 2nd. Bought goods for cash 5000 3rd. Sold goods for cash 4000 4th. Goods purchased from Ravi Kumar 10000 10th. Paid to Ravi Kumar 7000 14th. Cash sales 8000 18th. Purchased furniture for office 4000 22nd. Paid wages 500 Fall 2012 25th. Paid rent 600 30th. Received commission 4000 30th. Withdrew for personal purpose 1000 Cash balance 170000 Hint: Goods Purchased from Ravi Kumar is a credit purchase. 5. Find out the missing figures. Office stationery 5000 Purchased during the year Closing stock 8000 25000 ? 3000 Opening stockConsumables 6000 ? 24000 Consumed for the year ? Hint : Office stationery consumed for the year =27000 Consumables purchased during the year = 22000 6. Explain the tools of management accounting. Master of Business Administration- MBA Semester 1 Fall 2012 MB0041 – Financial and Management Accounting- 4 Credits (Book ID: B1624) Assignment Set – 2 (60 Marks) Note: Each question carries 10 Marks. Answer all the questions. 1. Compute trend ratios and comment on the financial performance of Infosys Technologies Ltd. from the following extract of its income statements of five years. in Rs. Crore) Particulars 2010-11 2009-10 2008-09 2007-08 2006-07 27,501 22,742 21,693 16,692 13,893 Operating Profit (PBIDT) 8,968 7,861 7,195 5,238 4,391 PAT from ordinary activities 6,835 6,218 5,988 4,659 3,856 Revenue (Source: Infosys Technologies Ltd. – Annual Report) Hint: The Revenue and Operating Profit (PBIDT) have almost doubled in four years. The PAT from ordinary activities has increased by 77. 26% in the same period. 2. What is fund flow analysis? What are the objectives of analysing flow of fund? From the following balance sheets of Joy Ltd. prepare a cash flow statement under indirect method. Liabilities 2005 2006 Equi ty share capital 3,00,000 4,00,000 8% redeemable pref. share capital 1,50,000 1,00,000 General reserve 40,000 70,000 Profit and loss 30,000 48,000 Proposed dividend 42,000 50,000 Sundry creditors 55,000 83,000 Bills payable 20,000 16,000 Provision for taxation 40,000 50,000 6,77,000 8,17,000 Goodwill 1,15,000 90,000 Land and building 2,00,000 1,70,000 80,000 2,00,000 1,60,000 2,00,000 Stock 77,000 1,09,000 Bills receivable 20,000 30,000 Total Assets Plant Sundry debtors Fall 2012 Cash 15,000 10,000Bank 10,000 8,000 Total 6,77,000 8,17,000 Additional Information a) Depreciation of Rs. 10,000 and Rs. 20,000 has been changed on plant and building during the current year. b) An interim dividend of Rs. 20,000 has been paid during the current year. c) Rs. 35,000 was paid during the current year for income tax. Hint: Cash flow from operating activities Rs. 1,25,000; Cash flow from investing activities (Rs. 1,20,000); Cash flow from financing activities (Rs. 12,000). 3. Calculate the cost o f raw materials purchased from the following data: Opening stock of raw materials Rs. 10,000Closing stock of raw materials Rs. 15,000 Expenses on purchases Rs. 5,000 Direct wages Rs. 50, 000 Prime costs Rs. 1, 00,000 Hint: Cost of Raw Materials purchased is Rs. 50,000 4. Distinguish between absorption costing and marginal costing 5. The Anchor Company Ltd. produces most of its electrical parts in its own plant. The company is at present considering the feasibility of buying a part from an outside supplier for Rs. 4. 50 per part. If this is done, monthly costs would increase by Rs. 1,000. The part under consideration is manufactured in department 1 along with numerous other parts.On account of discontinuing the production of this part, department 1 would have somewhat reduced operations. The average monthly usage production of this part is 20,000 units. The costs of producing this part on per unit basis are as follows. Material Rs. 1. 80 Labour (half-hour) 2. 40 Fixed overheads 0. 80 Total costs 5. 00 Should the company produce this part or should it buy from an outside supplier? Fall 2012 Hint: Differential costs 7,000 per month Favouring making of the parts 6. Explain the essential features of budgetary control. 0. 35 er unit