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ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS) END SEMESTER EXAMINATIONS – MARCH/APRIL 2018

B.B.A. – VI SEMESTER

M1 15MC 601: MANAGEMENT ACCOUNTING

Duration: 3 Hours Max. Marks: 70 SECTION - A

I) Answer any TEN questions. Each carries 1 mark. (10x1=10)

1. Differentiate between Financial Accounting and Management Accounting based on the users of data.

2. State two Objectives of Comparative statements.

3. Where will Funds lost in operation appear in a Fund Flow Statement?

4. How is a Fund flow statement different from a Balance sheet?

5. Mention two examples of Cash Flow from Financing activities.

6. Define Management Accounting.

7. State any two objectives of Management Reporting.

8. The Average stock of a firm is Rs 1,00,000 and its opening stock is Rs 10,000 less than the closing stock. Calculate its Opening and Closing stock.

9. A firm has a working capital of Rs 60,000 and a current ratio of 2.5 . Compute Current liabilities.

10. The opening balance in the provision for taxation account as on 1 ^st June 2016 was Rs 30,000 and the closing balance on 30 ^th June 2016 was Rs 40,000. The provision for taxation made during the month amounted to Rs. 35,000. Calculate the amount of tax paid during the period.

11. Give an example of a transaction that does not result in flow of funds.

12. From the following particulars compute Cash flow from/used in Investing activities:

Particulars Amount (Rs)

Opening Balance of Cash and Cash Equivalents 10,000 Closing Balance of Cash and Cash Equivalents 80,000 Net Cash flow from Operating activities 70,000 Net Cash flow from Financing activities 50,000

SECTION - B

II) Answer any THREE questions. Each carries 6 marks. (3x6=18)

13. From the following information, compute Trend Ratios. Use 2013 as the base year.

Amount for the year ended: (Interpretation not required)

REG NO:

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Particulars 2013 2014 2015 2016 2017

Capital 4,00,000 5,00,000 5,60,000 6,00,000 7,00,000 Fixed Assets 3,00,000 3,60,000 4,00,000 4,20,000 3,80,000 Current Assets 1,80,000 2,80,000 3,00,000 3,40,000 5,20,000 Current

Liabilities 80,000 1,40,000 1,40,000 1,60,000 2,00,000 14. Extracts of Balance Sheets are given below:

Particulars 31/12/16 31/12/17

Balance of P&L A/c 2,00,000 3,00,000

Additional information

i. Depreciation charged on assets 20,000

ii. Preliminary expenses written off 10,000

iii. Amount transferred to dividend Equalization fund

30,000 iv. A plant having a book value of Rs.

1,20,000 was sold for 1,30,000

v. Interim dividend paid 20,000

Calculate Funds from operation.

15. The following are the Summarized profit and loss account as on 31/12/2017 and balance for the year ending March 31/12/2017:

Profit And Loss Account

Particulars Amount Particulars Amount

To Opening Stock 99,500 By Sales 8,50,000

To Purchases 5,45,250 By Closing stock 1,49,000

To Wages 14,250

To Gross Profit 3,40,000

9,99,000 9,99,000

To Administrative exp 1,50,000 By Gross profit b/d 3,40,000

To Selling exps 30,000 By interest 3,000

To Finance Charges 15,000 By Profit on sale of investment

6,000 To Loss on sale of asset 4,000

To Net profit 1,50,000

3,49,000 3,49,000

Balance Sheet as on 31/12/2017

Liabilities Amount Assets Amount

Share capital 2,00,000 Building 1,50,000

Reserves 90,000 Machinery 80,000

Profit and Loss A/c 60,000 Stock 1,49,000

Current liabilities 1,30,000 Debtors 71,000

Cash 30,000

4,80,000 4,80,000

You are required to calculate the following ratios:

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Page 3 of 6 (a) Current ratio (b) Liquid ratio (c) Operating ratio (d) Stock turnover ratio (e)Gross profit Ratio.

16. State with reasons and to what extent, whether the following transactions result in an increase or decrease in working capital or do not affect the working capital:

(a) A company realizes Rs 40,000 from its debtors.

(b) Preliminary expenses written off Rs 60,000.

(c) Advance Income tax paid Rs 80,000.

(d) A company raises Rs 1,00,000 by the issue of new shares.

(e) A Building was purchased for Rs 2,00,000.

(f) Issue of debentures worth Rs.3,00,000.

17. Briefly explain the role of a Management Accountant in the present scenario.

SECTION - C

III) Answer any TWO questions. Each carries 15 marks. (2x15=30) 18. Prepare a Balance sheet from the following particulars and ratio’s furnished:

Stock Velocity : 6

Gross profit Margin :20%

Capital turnover Ratio :2

Fixed Assets turnover ratio :4

Debt Collection period :2 Months Creditors payment period : 73 days Gross profit was Rs 60,000.

Excess of closing stock over opening stock was Rs 5,000.

Difference in Balance sheet represents Bank balance. The entire sales and purchases are made on credit basis.

19. From the following Balance Sheets and additional information given below:

(i) Prepare a schedule of changes in working capital (ii) Compute Funds from/lost in Operation

(iii) Prepare a Fund flow statement.

Particulars Note

No. 31.12.2017 31.12.2016

Shareholders' Funds:

Share Capital 10,00,000 8,00,000 Reserves and Surplus 1 4,30,000 2,80,000

Non-current Liabilities:

Long-term borrowings (Bank Loan) 2,00,000 6,00,000

Current Liabilities:

Trade Payables (Creditors) 2,80,000 6,00,000

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Page 4 of 6 Short-term provisions 3,40,000 2,40,000

TOTAL 22,50,000 25,20,000

Non-current assets:

Fixed Assets 2 16,00,000 15,00,000

Current Assets:

Inventories 5,00,000 8,00,000 Trade Receivables (Debtors) 80,000 1,00,000

Cash and Cash Equivalents 70,000 1,20,000

TOTAL 22,50,000 25,20,000

Note: 1:

Reserves and Surplus: 31.12.2017 31.12.2016

General Reserve 2,80,000 1,60,000

Profit and Loss A/c 1,50,000 1,20,000 4,30,000 2,80,000 Note: 2:

Fixed Assets

Buildings 10,00,000 8,00,000

Plant 6,00,000 7,00,000

16,00,000 15,00,000 Additional Information:

a The Company acquired a building worth Rs. 2,00,000 be issuing an equal number of shares of Rs. 10 each to the vendors.

b Depreciation on the plant sold by the company amounted to Rs.

70,000 . Loss on sale of plant Rs. 20,000 was debited to the Profit and Loss A/c.

20. (i) X Ltd. made a profit of Rs. 87,000 after considering the following items:

a) Depreciation on Fixed Assets Rs. 25,000 b) Writing off preliminary expenses Rs. 10,000 c) Loss on sale of furniture Rs. 1,000

d) Provision for taxation Rs. 1,60,000 e) Transfer to General Reserve Rs. 14,000 f) Profit on sale of machinery Rs. 6,000

The following addition information is available to you:

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Page 5 of 6 31.03.2017

(Rs.) 31.03.2016 (Rs.)

D.T.A. (Net) 17,000 25,000

Debtors 30,000 24,000

Creditors 30,000 20,000

Bills Receivables 17,000 20,000

Bills Payables 12,000 16,000

Prepaid Expenses 600 400

Calculate Cash Flow from operating activities.

(ii) Examine the general principles of a good reporting system?

(9+6) 21. The comparative Balance Sheets of X Ltd are given below:

Balance Sheet as at 31.12.2017

Particulars Note. 31.12.2017 31.12.2016

I. EQUITY AND LIABILITIES:

Shareholders' Funds:

(a) Share Capital 1,90,000 90,000

(b) Reserves and Surplus 1 3,02,000 2,36,000

Non-current Liabilities:

(a) Debentures 1,02,000 1,02,000

( b) Premium on Redemption of Debentures

18,000 18,000

Current Liabilities:

(a) Trade Payables (Creditors) 24,000 14,000

TOTAL 6,36,000 4,60,000

II. ASSETS:

Non-current assets:

(a) Fixed Assets:

(i) Tangible Assets 2 2,80,000 3,00,000

(ii) Intangible Assets (Goodwill) 36,000 40,000

Current Assets:

(a) Inventories 1,12,000 60,000

( b) Trade Receivables (debtors) 1,04,000 24,000 ( c) Cash and Cash Equivalents 82,000 22,000 (d) Other Current Assets 22,000 14,000

TOTAL 6,36,000 4,60,000

Note: 1:

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Reserves and Surplus 31.12.2017 31.12.2016

Share Premium 30,000 -

Reserves 2,72,000 2,36,000

3,02,000 2,36,000 Note: 2:

Tangible Assets 31.12.2017 31.12.2016

Plant and Machinery 3,80,000 3,60,000

Acc. Depreciation on Plant & Mach - 1,00,000 - 60,000 2,80,000 3,00,000 Additional information:

Dividend paid Rs.6, 000.

You are required to prepare a Cash Flow Statement.

SECTION - D

IV) Case Study – Compulsory question. (1x12=12) 22. Following are the Balance Sheets of Arora Ltd.

Particulars 31/03/2017 31/03/2016

Assets

Fixed Assets 5,30,000 2,10,000

Cash 30,000 32,000

Book Debts 4,00,000 2,00,000

Prepaid Expenses 20,000 26,000

Inventory 20,000 32,000

10,00,000 5,00,000 31/03/2017 31/03/2016 Liabilities

Share Capital 6,00,000 2,00,000

Long term debt 2,00,000 1,00,000

Sundry creditors 40,000 60,000

Other current liabilities 1,60,000 1,40,000 10,00,000 5,00,000 Required:

a) Prepare a Common Size Balance Sheet of Arora Ltd

b) Prepare a Schedule Of Changes Of Working Capital from the above information

c) Calculate the Current Ratio for the year ending 31.3.2017

d) Has fixed assets of the company been financed out of working capital or long term funds? Interpret the workings of the firm with regard to the same.

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ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS) END SEMESTER EXAMINATIONS – MARCH/APRIL 2018

B.B.A. – VI SEMESTER

M1 15MC 601: MANAGEMENT ACCOUNTING

Duration: 3 Hours Max. Marks: 70 SECTION - A

I) Answer any TEN questions. Each carries 1 mark. (10x1=10)

1. Differentiate between Financial Accounting and Management Accounting based on the users of data.

2. State two Objectives of Comparative statements.

3. Where will Funds lost in operation appear in a Fund Flow Statement?

4. How is a Fund flow statement different from a Balance sheet?

5. Mention two examples of Cash Flow from Financing activities.

6. Define Management Accounting.

7. State any two objectives of Management Reporting.

8. The Average stock of a firm is Rs 1,00,000 and its opening stock is Rs 10,000 less than the closing stock. Calculate its Opening and Closing stock.

9. A firm has a working capital of Rs 60,000 and a current ratio of 2.5 . Compute Current liabilities.

10. The opening balance in the provision for taxation account as on 1 st June 2016 was Rs 30,000 and the closing balance on 30 th June 2016 was Rs 40,000. The provision for taxation made during the month amounted to Rs. 35,000. Calculate the amount of tax paid during the period.

11. Give an example of a transaction that does not result in flow of funds.

12. From the following particulars compute Cash flow from/used in Investing activities:

Particulars Amount (Rs)

Opening Balance of Cash and Cash Equivalents 10,000 Closing Balance of Cash and Cash Equivalents 80,000 Net Cash flow from Operating activities 70,000 Net Cash flow from Financing activities 50,000

SECTION - B

II) Answer any THREE questions. Each carries 6 marks. (3x6=18)

13. From the following information, compute Trend Ratios. Use 2013 as the base year.

Amount for the year ended: (Interpretation not required)

REG NO:

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Particulars 2013 2014 2015 2016 2017

Capital 4,00,000 5,00,000 5,60,000 6,00,000 7,00,000 Fixed Assets 3,00,000 3,60,000 4,00,000 4,20,000 3,80,000 Current Assets 1,80,000 2,80,000 3,00,000 3,40,000 5,20,000 Current

Liabilities 80,000 1,40,000 1,40,000 1,60,000 2,00,000 14. Extracts of Balance Sheets are given below:

Particulars 31/12/16 31/12/17

Balance of P&L A/c 2,00,000 3,00,000

Additional information

i. Depreciation charged on assets 20,000

ii. Preliminary expenses written off 10,000

iii. Amount transferred to dividend Equalization fund

30,000 iv. A plant having a book value of Rs.

1,20,000 was sold for 1,30,000

v. Interim dividend paid 20,000

Calculate Funds from operation.

15. The following are the Summarized profit and loss account as on 31/12/2017 and balance for the year ending March 31/12/2017:

Profit And Loss Account

Particulars Amount Particulars Amount

To Opening Stock 99,500 By Sales 8,50,000

To Purchases 5,45,250 By Closing stock 1,49,000

To Wages 14,250

To Gross Profit 3,40,000

9,99,000 9,99,000

To Administrative exp 1,50,000 By Gross profit b/d 3,40,000

To Selling exps 30,000 By interest 3,000

To Finance Charges 15,000 By Profit on sale of investment

6,000 To Loss on sale of asset 4,000

To Net profit 1,50,000

3,49,000 3,49,000

Balance Sheet as on 31/12/2017

Liabilities Amount Assets Amount

Share capital 2,00,000 Building 1,50,000

Reserves 90,000 Machinery 80,000

Profit and Loss A/c 60,000 Stock 1,49,000

Current liabilities 1,30,000 Debtors 71,000

Cash 30,000

4,80,000 4,80,000

You are required to calculate the following ratios:

Page 3 of 6 (a) Current ratio (b) Liquid ratio (c) Operating ratio (d) Stock turnover ratio (e)Gross profit Ratio.

16. State with reasons and to what extent, whether the following transactions result in an increase or decrease in working capital or do not affect the working capital:

(a) A company realizes Rs 40,000 from its debtors.

(b) Preliminary expenses written off Rs 60,000.

(c) Advance Income tax paid Rs 80,000.

(d) A company raises Rs 1,00,000 by the issue of new shares.

(e) A Building was purchased for Rs 2,00,000.

(f) Issue of debentures worth Rs.3,00,000.

17. Briefly explain the role of a Management Accountant in the present scenario.

SECTION - C

III) Answer any TWO questions. Each carries 15 marks. (2x15=30) 18. Prepare a Balance sheet from the following particulars and ratio’s furnished:

Stock Velocity : 6

Gross profit Margin :20%

Capital turnover Ratio :2

Fixed Assets turnover ratio :4

Debt Collection period :2 Months Creditors payment period : 73 days Gross profit was Rs 60,000.

Excess of closing stock over opening stock was Rs 5,000.

10. The opening balance in the provision for taxation account as on 1 ^st June 2016 was Rs 30,000 and the closing balance on 30 ^th June 2016 was Rs 40,000. The provision for taxation made during the month amounted to Rs. 35,000. Calculate the amount of tax paid during the period.