DOEACC Society 2006 DOEACC B Level BE9 Accounting

c) Allow 5% interest on capital.
d) Wages outstanding as on 31st March 2006 was Rs. 500.
e) Interest due on Bank overdraft as on 31st March 2006 was Rs. 800.
(18)
3. Consider the subsequent Balance sheet and info.
Balance Sheet, Dec. 31, 2005
Liabilities (Rs.) Assets (Rs.)
Equity share capital 10,00,000 Plant and equipment 6,40,
000
(Rs.100 each) Land and buildings 80,00
0
Retained earnings 3,68,000 Cash 1,60,
000
Sundry creditors
Bills payable
1,04,000
2,00,000
Sundry debtors
3,60,000
Less allowances
40,000
3,20,000
Other current liabilities 20,000
Stock 4,80,
000
Prepaid insurance 12,00
0
16,92,000 16,92
,000
Statement of profit year ended Dec. 31, 2005
Rs.
Sales 40,00,000
Less cost of goods 30,80,000
Gross profit on sales 9,20,000
Less operating expenses 6,80,000
Net profit 2,40,000
Less taxes @ 50% 1,20,000
Net profit after taxes 1,20,000
Sundry debtors and stock at the beginning of the year were Rs. 3,00,000 and Rs.
4,00,000 respectively.
Determine the subsequent ratios.
a) Current ratio
b) Acid-Test ratio
c) Stock turnover ratio
d) Gross profit margin
e) Operating ratio
f) Earning Per Share
BE9-R3 Page two of four July, 2006
g) Net Profit Ratio
h) Net Worth Expense to total Assets Ratio
i) Return on Investment
(9x2)
BE9-R3 Page three of four July, 2006
4. 3 firms A, B and C manufacturers the identical product. The selling price is Rs. nine per
unit of the product and is equal for all the firms. The fixed costs for Firms A, B and C are
Rs. 1,00,000/-, Rs. 2,00,000/- and Rs. 3,00,000/- respectively, while the variable costs
per unit is Rs. 5, Rs. four and Rs. three respectively.
i) Determine Break-even point for all the firms.
ii) How much profits are earned by the firms, if every of them sells 80,000 units?
iii) What shall be the impact on their profits if the selling price increase by 25 percent?
(3x6)
5. From the subsequent particulars, prepare cash flow statement for the year ended 31st
March, 2006:
Profit and Loss Account
for the year ended 31st March, 2006
Rs. Rs.
To Opening Stock 2,90,000 By stock 18,93,000
To Purchases 9,53,000 By Closing Stock 3,11,000
To Wages 2,87,000
To Power 24,000
To Gross Profit c/d 6,50,000
22,04,000 22,04,000
To Rent 1,50,000 By Gross Profit b/d 6,50,000
To Salaries 2,14,000
To Electricity 10,000
To Petty Office Expenses 9,500
To Loss on Disposal of
Furniture
4,000
To Depreciation on Machinery 40,500
To Depreciation on Furniture 12,000
To Goodwill written off 20,000
To Preliminary Expenses
written off
10,000
To Provision for Income Tax 90,000
To Net Profit c/d 90,000
6,50,000 6,50,000
To Propose Dividend 78,000 By Net Profit b/d 90,000
To Transfer to General
Reserve
12,000
90,000 90,000
Balance Sheets
As on
31.3.200
5
As on
31.3.200
6
As on
31.3.200
5
As on
31.3.200
6
Rs. Rs. Rs. Rs.
Equity Share Capital 6,00,000 6,50,000 Goodwill 60,000 40,000
General Reserve 1,00,000 1,12,000 Machinery 1,70,000 2,29,500
Creditors 65,000 62,200 Furniture 1,35,000 1,08,000
Outstanding Stock 2,90,000 3,11,000
Expenses 2,000 3,800 Debtors 80,000 83,000
Provision for Taxation 80,000 90,000 Cash on hand 3,000 4,000
Proposed Dividend 66,000 78,000 Cash at Bank 75,000 1,13,000
Prepaid Expenses --- 2,500
Advance Payment of
Income Tax
80,000 95,000
Preliminary Expenses 20,000 10,000
9,13,000 9,96,000 9,13,000 9,96,000
BE9-R3 Page four of four July, 2006
BE9-R3 Page five of four July, 2006
The subsequent additional info is given to you:
i) During the year, Furniture of the book value of Rs. 15,000 was sold for Rs. 11,000 and
new Machinery costing Rs. 1,00,000 was purchased and put into operation.
ii) During the year, dividend for the year 2004-05, Rs. 66,000 was paid.
(18)
6. Vinak Ltd. Operating at 75% level of activity produces and sells 2 products A and B.
The cost sheets of these 2 products are as under.
Product A Product B
Units produced and sold 600 400
Direct material (per unit) Rs. two Rs. 4
Direct labour (per unit) Rs. four Rs. 4
Factory overheads (40% fixed) Rs. five Rs. 3
Selling and Administration
Exp. (60% fixed) eight 5
Total Cost (per unit) Rs. 19 Rs. 16
Selling price (per unit) Rs. 23 Rs. 19
Factory overheads are absorbed on the basis of machine hour, which is the key factor.
Machine hour rate is Rs. 2/- per hour.
The company receives an offer from Canada for the purchase of product A at a price of
Rs. 17.50 per unit. Alternatively the company has a different offer from the Middle East for
the purchase product B at a price of Rs. 15.50 per unit.
In both the cases special packing charge of Rs. 0.50 per unit has to be borne by the
company.
The Company can accept either of the 2 export orders and in either case the
Company can supply such volumes as may be possible to produce by utilizing the
balance of 25% capacity.
Prepare: -
a) A statement showing the economic of the 2 export proposals giving your
recommendations as to which proposal should be accepted and
b) A statement showing overall profitabilities of the company after incorporating the export
proposal recommended by you.
(9+9)
7.
a) What do you mean by Funds flow statement? discuss the steps to prepare it.
b) Write short notes on any 4 of the following:
i) Profitability Index
ii) Financial Leverage
iii) Process Costing
iv) Ratio Analysis
v) Absorption Costing
(9+9)
BE9-R3 Page six of four July, 2006

Earning:   Approval pending.