Bangalore University 2008-2nd Year B.Com Management accounting- 08 - Question Paper
III Year B.Com. Examination, June 2008 (1997-98 Scheme) COMMERCE (Elective -1) Management Accounting (Paper - II)
Illlllll III III 111 III III! III!
Max. Marks : 100
Time : 3 Hours
Instruction : Answers should be written completely either in English or in
Kannada.
SECTION - A
Answer any eight of the following_sub-questions in not more than four lines each.
(2x8=16)
Each sub-question carries 2 marks :
1. a) Give the meaning of Management Accounting.
b) What is Trend analysis ?
c) What is Ratio analysis ?
d) State any four components of current assets.
e) What is Activity Ratio ?
f) What do you mean by Net Working Capital ?
g) What is cash flow statement ?
h) What do you understand by variance ?
i) What is Management Reporting ?
j) Gross profit Ratio of a firm is 25% gross profit is Rs. 1,00,000. Calculate the sales.
k) Average stock of a firm is Rs. 50,000. Its Opening Stock is Rs. 10,000 less than its closing stock. Find out the opening and closing stock.
1) Variable cost Rs. 50,000, fixed cost Rs. 30,000 and profit Rs. 10,000. Calculate the amount of sales.
2. Distinguish between Financial Accounting and Management Accounting.
3 Decisions taken on the basis of financial statements may not be regarded as final and accurate. Comment.
4. State with reasons whether the following transactions result in increase or decrease of working capital or do not affect the working capital.
a) Bills Receivable Rs. 10,000 was discounted for Rs. 9,000
b) 10% debentures Rs. 80,000 redeemed at 5% premium.
c) Buildings purchased for Rs. 3,00,000 by issue of equity shares of the same amount.
d) Preliminary expenses writen off Rs. 5,000
5. The expenses for production of 10,000 units are given below :
Per unit
Materials 8 0
Labour 40
Manufacturing expenses (50% fixed) 20
Selling and distribution expenses (40% fixed) 10
Administration expenses (Fixed) 10
Total cost 160
Profit 40
Selling price 200
Prepare a flexible budget for 8000 units and 12000 units indicating cost per unit also.
Labour rate Hours
Actual production data are : Units produced Labour rate Hours worked Calculate:
Rs. 1.80 per hour 4 hours per unit
400 units
Rs. 1.90 per hour
1500
a) Labour Cost Variance
b) Labour rate Variance
c) Labour efficiency variance
SECTION - C
Answer any four of the following questions. Each question carries 15 marks : (4x15=60)
7. Following are the Balance Sheets of Rama Company Ltd. and Krishna Company Ltd. as on 31-12-2007
Assets Rama Co. Ltd. Krishna Co. Ltd.
Rs. Rs.
|
Land and Buildings |
1,60,000 |
2,40,000 |
|
Plant and Machinery |
6,00,000 |
12,50,000 |
|
Investments |
2,00,000 |
4,00,000 |
|
Stock |
3,00,000 |
4,00,000 |
|
Sundry Debtors |
2,00,000 |
2,40,000 |
|
Cash and Bank Balances |
1,40,000 |
2,70,000 |
|
16,00,000 |
28,00,000 |
|
Liabilities |
Rs. |
Rs. |
|
Equity share capital |
4,00,000 |
6,00,000 |
|
12% Debentures |
2,00,000 |
4,00,000 |
|
10% Preference share capital |
4,00,000 |
5,00,000 |
|
Reserves and Surplus |
2,00,000 |
2,40,000 |
|
Dividend equalisation fund |
1,00,000 |
1,40,000 |
|
Sundry creditors |
3,00,000 |
8,20,000 |
|
Bank overdraft |
1,00,000 | |
|
16,00,000 |
28,00,000 | |
|
Compare the financial position of the two companies with the help size balance sheets and comment. | ||
|
The following information is given to you : | ||
|
1) Current Ratio |
- 2.5 | |
|
2) Liquidity Ratio |
- 1.5 | |
|
3) Net Working capital |
- Rs. 3,00,000 | |
|
4) Stock turn over ratio (cost of sales /closing stock) |
- 6 times | |
|
5) Gross Profit Ratio |
- 20% | |
|
6) Fixed Assets turn over ratio |
- 2 times | |
7) Average debt collection period - 2 months
8) Fixed Assets : share holders net worth 1 : 1
9) Reserves : share capital 0.5 : 1
Draw up a Balance Sheet from the above information.
9. Balance Sheets Shining India Ltd.
Cash at Bank 2,500 2,700
Sundry Debtors 87,490 73,360
Stock 1,11,040 97,370
Plant and Machinery 1,12,950 1,16,200
Land and Buildings 1,48,500 1,44,250
Goodwill - 20,000
Sundry creditors 39,500 41,135
Bills payable 33,780 11,525
Bank overdraft 59,510 -
Provision for taxation 40,000 50,000
Reserves 50,000 50,000
Profit and Loss A/c 39,690 41,220
Share Capital 2,00,000 2,60,000
Additional information :
a) During the year 2007, an interim dividend of Rs. 26,000 was paid.
b) The assets of another company were purchased for Rs. 60,000 payable in fully paid shares of the company. The assets consisted of stock Rs. 22,000, Machinery Rs. 18,000 and Goodwill Rs. 20,000.
c) Purchase of plant for cash Rs. 5,600 was made during the year 2007.
d) Tax paid during 2007 was Rs. 25,000
e) The Net profit for the year 2007 before tax was Rs. 62,530.
Prepare a Fund Flow Statement and a Statement showing changes in working capital.
10. The following are the summarised Balance Sheet of a company as on 31-3-2006 and 31-3-2007.
Liabilities 31-3-2006 31-3-2007
Rs. Rs.
Share Capital 4,00,000 5,00,000
General Reserve 1,00,000 1,20,000
P/LA/c 61,000 61,200
Long term loan 1,40,000
Sundry creditors 3,00,000 2,70,400
Provision for taxation 60,000 70,000
10,61,000 10,21,600
Assets
Buildings 4,00,000 3,80,000
Machinery 3,00,000 3,38,000
Stock 2,00,000 1,48,000
Sundry Debtors 1,60,000 1,28,400
Cash 1,000 1,200
Bank - 16,000
Goodwill - 10,000
10,61,000 10,21,600
Additional information :
During the year 31st March 2007:
1) Dividend of Rs. 46,000 was paid
2) Assets of another company were purchased for consideration of Rs. 1,00,000 payable in shares. Assets purchased were stock Rs. 40,000, Machinery
-7-
Rs. 50,000
3) Machinery was further purchased for Rs. 16,000
4) Depreciation written off on Machinery Rs. 24,000
5) Income tax provided during the year Rs. 66,000 Prepare the Cash Flow Statement.
11. The operating results of a company for the last two years are as follows :
Sales 2,70,000 3,00,000
Profit 6,000 15,000
Calculate:
a) P/V ratio
b) Fixed costs
c) Sales to make Rs. 1,00,000 profit
d) BEP
e) Margin of safety at a profit of Rs. 24,000
f) Profit earned at Rs. 5,00,000 sales
12. The profits of Ashwini Ltd. are declining year by year. As a Management Accountant of that company, draft a report to the management exploring reasons for declining profits and suggesting corrective measures.
|
Attachment: |
| Earning: Approval pending. |
