University of Mumbai 2005 B.Com Management accounting - Question Paper

b) provided beneath are a few of the info of Parekar Ltd. as on 31st March, 2004. (6)

Rs.
Debtors 30,000
Outstanding Manufacturing Exp. 17,000
Cash Balance 23,000
Bills Payable & Creditors 38,000
Machinery (Imported) 30,000
Income earned but not received 6,000
Bank Overdraft 15,000
Bills Receivable 7,000
Prepaid traveling expenses 4,000

Using above data compute current ratio and liquid ratio and comment on it. (6)

c) compute Return on Capital employed and Return on Proprietor’s Fund from subsequent info. (5)

Rs.
Equity Capital 3,00,000
General Reserves 4,00,000
Profit & Loss A/c 1,50,000 (Cr.)
Sundry creditors 2,00,000
Operating Profit 3,50,000 (Before Interest & Tax)
Long Term Loan 2,00,000 (at 12% p.a. Interest)
Tax Rate is 30%.

Q.6. Chinmag is carrying on trading business in India and provide the subsequent info. (1) Estimated sales in year Rs. 12,00,000. (2) His Administrative & Selling expenses are estimated as fixed expenses Rs. 2,000 per month and variable expenses equal to 5% of his turnover. (3) He expects to fix sale price for every product which will be 25% in excess of his cost of purchase. (4) He expects to turnover his stock 4 times in the year. (5) The sales & Purchases will be evenly spread throughout the year. 20% of sales will be on cash and balance on credit and allowed two months credit. He also expects 1 month credit from his suppliers. (6) Cash Balance = Fixed and variable expenses for 1 month.
compute his avg. working capital and prepare his income statement for the year. (16)

Q.7. Vinod Honorable Ltd. presents you with their summarized Profit & Loss A/c with the request to convert the identical into a common size statement in vertical form after incorporating the info provided there under & briefly comment on it. (16)

Profit and Loss Account for the year ended 31-12-2004

Particulars Rs. Particulars Rs.
To Opening Bal. B/d. 1,00,000 By Sales 10,00,000
To Opening Stock : Raw
Material Finished goods 2,00,000
1,50,000 By Dividend received 2,00,000
To Purchases : Raw
Material Finished goods 3,50,000
60,000 By Closing Stock : Raw
Material Finished goods 2,00,000
3,00,000
To Manufacturing Exp. 1,00,000
To Establishment Exp. 2,82,000
To Interim Dividend 35,000
To Provision for Tax 75,000
To Audit fees 2,500
To Directors Fees 2,000
To Preliminary Expenses 5,000
To Salaries & Wages 1,00,000
To Depreciation on : Delivery
Van Building for Office 1,000
1,500
To Int. on Secured Loan 10,000
To Selling & Distribution Exp. 75,000
To Loss on Sales of Fixed Assets 10,000
To Transfer to General Reserve 10,000
To Proposed Dividend 55,000
To Balance c/d 76,000
17,00,000 17,00,000

Other info : Establishment expenses include a sum of Rs. 12,000 written-off as bad debts.

Q.8. Complete the subsequent comparative statement of Mahesh Pvt. Ltd. by ascertaining the missing figures and underline the missing figures ascertained. (16)

Particulars 2003 Rs. 2004 Rs. Absolute Increase/Decrease Rs. Increase/Decrease %
Sales 6,00,000 ? +3,00,000 ?
Cost of Goods Sold : Opening Stock ? 60,000 +10,000 ?
Purchases 4,00,000 ? +80,000 ?
Closing Stock ? ? ? ?
Cost of Goods Sold ? ? +97,500 +25%
Gross Profit ? ? ? ?
Operating Expenses
(a) Administrative Exp. 40,000 ? ? +100%
(b) Financial Exp. 60,000 72,000 ? ?
(c) Selling Exp. ? 1,50,000 +1,00,000 +200%
Total Operating Exp. ? ? ? ?
Net Profit Before Tax 60,000 1,10,500 ? ?
Provision for Tax ? ? ? ?
Net Profit after Tax 36,000 ? +27,000 +75%

Q.9. Write note on any four: (16)

a) Liquid Assets.
b) Contingent Liabilities.
c) Cash Flow v/s Fund Flow.
d) Trading on equity.
e) Debtors Turnover Ratio & Creditors Turnover Ratio.
f ) Selection of Accounting Software.

Earning:   Approval pending.