University of Mumbai 2006 B.A Economics Management Accounting - A%2Fc 3 omber - Question Paper

Management Accounting
Octomber 2006
Time: three HoursMarks: 100
NB:
ques. No. one is compulsory and carries 20 marks.
Attempt any 5 ques. from remaining ques. every carrying 16 marks.
All working notes should form part of your ans.
Proper presentation and neatness is essential.
part I-(Auditing)
Q.1 (a) The Balance Sheets of Dinesh Ltd. are as follows: 20
Balance sheet as at 31st March, 2005 and 2006.
Liabilities 2005 2006 Assets 2005 2006
Rs. Rs. Rs. Rs.
Equity share capital 3,00,000 5,00,000 Goodwill 1,10,000 90,000
General Reserve - 60,000 Land and Building 1,60,000 1,80,000
Profit and Loss A/c - 58,000 Plant and Machinery 80,000 2,00,000
Debentures 2,00,000 - Stock 84,000 1,06,000
Sundry Creditors 1,14,000 92,000 Debtors 1,80,000 1,56,000
Bills Payable 60,000 12,000 Advance Income Tax - 40,000
Provision for Income Tax - 50,00 Bills Receivable 16,000 24,000
Proposed Dividend - 40,000 Prepaid Expenses 12,000 8,000
Cash in Hand 20,000 8,000
Profit and Loss A/c 12,000
6,74,000 8,12,000 6,74,000 8,12,000

Additional Information:
During the year ended 31-03-2006. Depreciation of Rs. 16,000 and Rs. 20,000 have been charged on Land and Building and Plant and Machinery respectively.
An Interim Dividend of Rs. 15,000 was paid during the year ended on 31-03-2006.
During the year Machinery having book-value of Rs. 16,000 was sold for Rs. 14,000.
Prepare cash flow statements by Indirect Method for the year ended 31st March, 2006 as per AS - 3.
Q 2. Aman and Ram are partners of M/S Aman Ram sharing Profits and Losses in the ratio of 3:2. Their Balance sheet as on 31st March, 2004 was as under: 16
Balance sheet as at 31st March, 2005 and 2006.
Liabilities Rs. Rs. Assets Rs. Rs.
Creditors 15,000 Bank 14,000
Reserves 10,000 Cash 3,000
Loan from Sanju 20,000 Debtors 29,000
Capitals: Less: RDD 1,000 28,000
Aman 30,000 Stock 30,000
Ram 25,000 55,000 Fixed Assets:
Cost 35,000
Less: Depreciation 10,000 25,000
1,00,000 1,00,000

As they wanted to go in for heavy expansion they decided upon the following, during the year ended 31st March, 2005:
Introduce fresh capital of Rs 20,000; Rs. 5,000 being by Aman and Rs. 20,000 being by Ram.
Admit Sanju as a partner on the subsequent terms:
(a) Aman, Ram and Sanju are to share profits and losses in the ratio of 2:2:1.

(b)Goodwill of the firm is worth Rs. 30,000 but it is privately settled by the partners without bringing it into the books of account of the firm.

(c)Sanju's loan is to be converted into his capital.

(d)Sanju is to bring in a further sum of Rs. 26,000.

M/s Aman purchased on first April, 2004 new fixed assets of Rs. 80,000. They sold part of the fixed assets costing Rs. 20,000 on which depreciation provision was Rs. 8,000 for Rs. 10,000. This amount was used to partially finance the purchase of fixed assets. M/s Aman Ram borrowed Rs. 50,000 from Bank of India for the purpose of financing the purchase of fixed assets. Out of this loan Rs. 10,000 was repaid during the year.

Earning:   Approval pending.