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Tamil Nadu Open University (TNOU) 2006 B.B.A Financial and Management Accounting - Question Paper

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B.B.A. DEGREE EXAMINATION - JANUARY, 2006.

(For AY 2004 - 05 and CY 2005 students)

First Year

FINANCIAL AND MANAGEMENT ACCOUNTING

Time : 3 hours Maximum marks : 75

PART A (3 x 5 = 15 marks)

Answer any THREE questions.

Each question carries equal marks.

1. What is a ledger? How does it differ from journal?

2, Write short notes on (a) purchases book (b) returns inward journal.

3. What is a cash flow statement? List out its uses.

4, Total fixed costs Rs. 18,000 Total variable costs Rs. 30,000 Total sales Rs. 60,000 Units sold Rs. 20,000

Find out (a) Contribution per unit (b) Break even point (c) Margin of safety.

5. Discuss the significance of the following ratios:

(a) Current ratio (b) Debt equity ratio.

PART B (4 x 15 = 60 marks)

Answer any FOUR questions. Each question carries equal marks.

6. Bombay Wala gives the following information about his business you are required to record them in proper subsidiary books and post them to ledger accounts.

Rs.

Bought goods from Daruwala

12,000

2005 March 1

2 Sold goods to devidutt 8,700

2 Bought goods from Batliwala

13,500

3 Sold goods to Peepawala 9,500

5 Returned goods to Batliwala

800

8	Peepawala returned goods	200
11	Sold goods to Ahmed bhai	12,800
15	Ahmedbhai returned goods	1,200
17	Bought goods from Nariman	13,700
18	Unapproved goods purchased from Nariman returned	3,700
24	Goods sold to Deshbandu	13,000
25	Goods sold to Devidutt	1,280
27	Goods purchased from Daruwala	18,000
29	Goods sold to Peepawala	15,000
30	Peepawala returned goods	1,300
31	Goods returned to Daruwala	400

7. Enter the following items in the two-column cash book.

2005 1 Tikaram commences business with cash April Rs. 10,000. He pays Rs. 2,300 for goods purchased. Rs. 500 for furniture purchased and Rs. 400 for office equipment.

2 He pays rent Rs. 100; pays legal cost Rs. 10

3 He sells goods for cash Rs. 1,800

4 He sells goods to N on 5 day's credit Rs. 800

5 He pays wages Rs. 15; cartage Rs. 5

6 He buys goods for cash Rs. 700 and pays a creditor S Rs. 425 in settlement of a claim of Rs. 430.

7 He receives cash from N Rs 798 in full settlement of debt

8 He sells goods for cash Rs. 50.

8. The following are the balances extracted from the Ledger of Sundar as on March 31st 2005. Prepare Trading, Profit and Loss Account and Balance Sheet.

Re.

Sundar's capital 20,000

Drawings 3,500

Buildings 10,000

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Machinery	2,500
Furniture	600
Opening stock	12,500
Cycle	400
Purchases	75,000
Sales	1,25,000
SaleB Returns	5,000
Duty paid on purchases	15,000
Sundry debtors	10,000
Sundry creditors	7,500
Reserve for bad and doubtful debts	400
Reserve for discount on debtors	200
Loan at 9% p.a	5,000
Salaries	4,400
Wages	7,500
Rent	2,750
Travelling Exp.	1,250

Postage	135
Rates and taxes	90
Carriage in	2,500
Carriage out	750
Interest paid	375
General charges	900
Bad debts	300
Cash	250
Bank	2,400

The following additional information given

(a) Stock on 31-3-2005, Rs. 14,000.

(b) Provide the following outstanding - salary Rs. 400, Rent Rs. 250, Wages Rs. 600 and interest on loan.

(c) Maintain reserve for doubtful debts at 5% and reserve for discount on debtors at 2 % %.

(d) Provide depreciation for building 2 %%, Machinery 10%, Furniture 6% and cycle 15%,

9. Prom the following Balance Sheets, Pynare a funds flow statement.

Liabilities	2003 Rs.	2004 Rs.	Assets	2003 Rs.	2004 Rs.
Share capital	5,00,000	6,00,000	Fixed assets	6,00,000	6,50,000
Reserve	1,00,000	1,20,000	Stock	1,00,000	3,00,000
P and L A/c	50,000	80,000	Debtors	50,000	10,000
6 % Debentures 1,00,000		1,40,000	Bills receivable	80,000	-
Creditors	30,000	20,000	Bank	70,000	40,000
Provision for tax 20,000		40,000
	8,00,000	10,00,000		8,00,000	10,00,000
Other informations:
(a)	During	2004,	fixed assets	(Book	value

Rs 10,000 and depreciation written off Rs. 3000) were sold for Rs. 8000)

(b) 6% debentures issued at par.

(c) Income tax paid Rs. 60,000

(d) Provision for depreciation 31-12-04 -Rs. 1,00,000. 31-12-05 - Rs. 1,50,000.

10. From the following information, calculate

(a) cuf jnt ratio (b) liquidity ratio (c) debt equity ratio

(d) fixed assets ratio (e) proprietary ratio (f) fixed assets turnover ratio (g) working capital turnover ratio and

(h) debtors turn over ratio.

Balance Sheet as on 31-3-2005.

Liabilities Rs. Assets Rs,

Equity share capital 1,00,000 land and Buildings 75,000

Reserve fund 50,000 Plant and machinery 80,000

P and L A/c 20,000 Stock 30,000

10% Debentures 50,000 Sundry Debtors 50,000

Sundry creditors 30,000 Bills receivable 20,000

Bills payable 15,000 Cash in hand 10,000

2,65,000 2,65,000

Additional Information:

Sales during the year Rs 80,000.

11. From the following data, calculate:

(a) Break-even point expressed in rupees

(b) Number of units that must be sold to earn a profit of Rs, 60,000 per year.

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(c) How many units must be sold to earn a net income of 10% on sales. f

Selling price Rs. 20 per unit

Variable manufacturing cost 11 per unit

Variable selling cost 3 per unit

Fixed factory overheads Rs. 5,40,000 per year

Fixed selling costs Rs. 2,52,000 per year

12. A firm expects to have Rs. 25,000 in bank on 1st May 2005 and requires you to prepare an estimate of cash position during the three months May - July 2005. The following information is made available.

Month	Sales Rs.	Purchases Rs.	Wages Rs.	Factory Exp Rs.	Office Exp Rs,	Selling Exp. Rb.
March	50,000	30,000	6,000	5,000	4,000	3,000
April	56,000	32,000	6,500	5,500	4,000	3,000
May	60,000	35,000	7,000	6,000	4,000	3,500
June	80,000	40,000	9,000	7,500	4,000	4,500.
July	90,000	40,000	9,500	8,000	4,000	4,500

Other Information:

(a) 20% of sales is for cash; remaining amount is collected in the month following that of sale.

(b) Suppliers supply goods at two months credit.

(c) All expenses including wages are paid in the monttyllo wing the one in which they are incurred.

(d) The company pays dividend to share holders and bonus to workers of Rs. 10,000 and Rs, 15,000 respectively in the month of May.

(e) Plant has been ordered and is expected to be received in June. It will cost Rs. 80,000.

(f) Income tax Rs. 25,000 is payable in July.

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