Osmania University (OU) 2009-1st Year M.B.A Accounting (CDE) , / t - Question Paper

Code No.: 8403/CDE

FACULTY OF MANAGEMENT
M.B.A. (CDE) I Year Examination, Aug. / Sept. 2009
FINANCIAL ACCOUNTING AND ANALYSIS
Course No. 103 – CDE
Paper - II

Time : three Hours] [ Max. Marks:100

Note: Answer all ques..

Part - A (Marks 10x two = 20)


1. Write short notes on the following:
(a) Journal
(b) Techniques of financial analysis
(c) Trial Balance
(d) Accounting rate of return
(e) Sources of funds
(f) Objectives of financial statements
(g) Transaction Analysis
(h) Concept of funds
(i) Accounting formula
(j) Horizontal Analysis

Part - B (Marks five x 16 = 80)

2.(a) discuss the concept of Accounting.
OR
(b) Distinguish ranging from a Journal and a Ledger. discuss the functions of every.

3.(a) describe Inventory and identify the costs that should be included as Inventory costs.
OR
(b) On first January 1999, Ram & Co. purchased a machinery costing Rs.5,00,000.00. Its estimated working life is 20 years at the end which it will fetch Rs.20,000. Additions are made on one January 2000 and one July, 2001 to the value of Rs.80,000 (scrap value Rs.4,000) and Rs.40,000 (scrap value Rs.2,000) respectively. The life of both the new machinery is 20 years. Show the Machinery Account for the relevant period and other relevant working notes.

4. (a)Explain carry forward and set off of losses..
OR
(b)On 31 March 2001, the subsequent Trial Balance was extracted from the books of Chatterji:

Dr. Rs. Cr. Rs.
Capital A/c - 50,000
Plant & machinery 71,000 -
Sales - 1,77,000
Purchases 60,000 -
Returns 10,000 750
Opening Stock 30,000 -
Discount 350 800
Bank charges 75 -
Sundry Debtors 45,000 -
Sundry Creditors - 25,000
SAlaires 6,800 -
Manufacturing wages 10,000 -
Carriage In 750 -
Carriage Out 1,200 -
Bad Debts provision - 525
Rent, Rates and Taxes 10,000 -
Advertisement 2,000 -
Cash in hand 900 -
Cash in Bank 6,000 -
---------- ----------
2,54,075 2,54,075
--------- ----------

You are asked to prepare the final accounts for the year ended 31st March 2001 and the Balance Sheet as on that date. The subsequent adjustments are required:

(i) Closing stock Rs.35,000.
(ii) Depreciation of plant at 6%.
(iii) Bad debts provision to be adjusted to Rs.500.
(iv) Interest on capital to be allowed at 5% per annum.
(v) 2 ½% of the profits is to be carried to Reserve Fund.

5.(a) Explain the financial ratios:

(i) Closing stock Rs.35,000.
(ii) Profitability rations
OR
(b) compute the degree of operating leverage, financial leverage and combined leverage for the subsequent firms and interpret the results:

P Q R
Output (units) 3,00,000 75,000 5,00,000
Fixed costs (Rs.) 3,50,000 7,00,000 75,000
Unit variable costs (Rs.) 1.00 7.50 0.10
Interest expenses (Rs.) 25,000 40,000 Nil
Unit selling price (Rs.) 3.00 25.00 0.50

6.(a)Why is Cash Flow Statement a useful statement?
OR
(b)A Comparative Balance Sheet of Madhu Co. Ltd. is as follows:

Liabilities 2005 2006 Assets 2005 2006

Capital 30,000 35,000 Land & Building 22,000 30,000
Loan from Bank 32,000 20,000 Machinery 40,000 28,000
Creditors 17,000 18,600 Stock 10,000 9,000
Outstanding expenses 1,000 1,400 Debtors 14,000 16,000
Bill payable 10,000 8,000 Cash 3,000 4,400
Loan from IFC - 5,000 Prepaid expenses 1,000 600
-------- ------- ------ -------
90,000 88,000 90,000 88,000
-------- ------- ------ -------

Additional information:

(i) Net profit for the year 2006 amounted to Rs.1,20,000.
(ii)During the year a machine costing Rs.50,000 (accumulated depreciation Rs.2,000) was sold for Rs.2,600. The provision for depreciation against machinery as on 3-12-2005 was Rs. 10,000 and on 31-12-2006 was Rs. 17,000.

Prepare a Cash Flow Statement.

Earning:   Approval pending.