University of Mumbai 2009 Diploma Financial Management in - Question Paper

Diploma in Financial Management

I sthalf-09-nkD 63

Con. 2101-09.

1*0^r Ov-rv ' .'C-c    p*v*

PCJfv* 3V - Toohon    luM'MPf

BB-8838

(3 Hours)    [ Total Marks : 100

N.B.:(1) Question No. 1 is compulsory.

(2)    Attempt any three questions from remaining.

(3)    Figures to the right indicates full marks.

(4)    Working notes and necessary assumptions forms part of answer.

(5)    Apply provisions for Assessment Year 2008-2009.

1. Dr. Samarth provides following information of his Income and Expenditure for Year 25 1-4-2007 to 31-3-2008.

Additionl Information :

(i)    He owns a Car, with W.D.V, of Rs. 2,65,000 on 1-4-2007. Depreciation to be charged @ 15 % p.a.

(ii)    Insurance Premium includes Rs. 10,000 for Life Insurance Premium. Out of remaining 25% is for rented property and balance is for clinic.

(iv)    Staff includes a domestic servant to whom salary is paid @ Rs. 1,000 p.m. for full year and bonus equal to one month salary.

(v)    He has deposited Rs. 15,000 in his PDF a/c.

(vi)    Investment Income includes Rs. 8,400 as interest on PPF and Rs. 12,600 as Dividend on Shares.

(vii)    He paid Rs. 10,000 as advance Tax.

(viii)    He is physically handicapped with hands amputed and is affected to extent of 75%,

Ascertain his taxable income and tax payable.

sthair-09-nkD 64

on. 2101-BB-8B38-09.    2

. Mrs. Maldar purchased a plot of land casting Rs. 24,000 in 15-7-1975 and paid 25

"SnrtHLS adding Which was ready for occupation on Sl-B-1986 The cost of construction was Rs. 6,60,000 He Oupied for

1-8-2005. Thereafter he let out one-third of building at a rent ol Rs. 7,500 P- and remaining was used for residence. Total property tax ,s Rs. 36,000, fill

The¹ entire property was sold on 1-1-2008 for total consideration of Rs. 32,00,000,

out of which be incurred expenses Rs. J .60,00(1

He received interest on debentures and depositsRs. 49,200/ .

He deposited Rs. 50,000 in PPF A/c.

Compute total income and compute tax payable.

Note: CCI1981>82 100    2007-08 540.

1986-87 140

3 (a) Ms Priyanka entered into a contract with a Swiss Company for Modelling

r     _in sw, i_{50 da}y_{S and}

Los Angeles for 126 days each year. During period May to February each m=ar For remaining period she stayed in India.

Ascertain her residential status for Assessment Year 2007-08 and 2008-09.

(b) Her income and expends for financial year 2007-08 was

(i)    Modelling Contract Fee    

(in equivalent Rs. 2,88,000.)

(ii)    Expenses for Modelling @ 40% of receipt

(Hi) Remuneration tor Mode! ConsuKano, - Outside lnd,a Rs . M00

(iv) Investment Income Rs. 72,000

(Out of which 30% in India and balance outside India.)

(V) She paid Life Insurance Premium Rs. 45,000 and

Medi-Claim Premium Rs. 12,000    n_HH;rt_Bntial

calculate her income and tax payable In accordance with her Residential

Status ascertained in Q. 3(a).

4. (a) Mr. Anmol Shah is the proprietor of M/s Anmol Traders furnishes following 15 information for Financial Year 2007-08.

(i)    Sales was Rs. 36,00,000, with Gross Profit Margin @ 33-% on Sales.

_(ii)    cash Operating Expenses were 12-5% on sales. Depreciation alLowcibl6 u/s 32 of KT. Act is Rs. 78,000

(iii)    Non-operating Income is Rs. 99,000 out of this Rs. 21.000 is exempt

fivl He is eligible for deduction u/s 80 C Rs. 51,000 ¹ '    80 D- Rs. 12,000

(v) He paid Advance Tax Rs. 10,000.

Calculate total income tax and tax payable.

1 sthalf-09-nkD 65

Con. 2101-8B-8838-09.    3

(b) M/s Amrut Industries a partnership firm provides following information of transactions in assets.

Particulars	Building	Furniture	Plant	Truck	Computer
Rate of Depreciation	10%	10%	15%	30%	60%
W.D.V. 1-4-07	3,60.000	96,000	5,75,000	2,70,000
Purchase 31-7-07		30,000	90,000		45,000
Purchases 15-10-07		24,000	60.000		30,000
SalesProceeds on
5-11-07	4,50,000	6,000	85.000	90,000
Sales Book Value	1,80,000	16,000	1,15,000	1,08,000

The profit before depreciation is Rs. 6,60,000.

Income from other sources is Rs. 57,000.

Amount paid to partners as per agreement and deductible is Interest on Capita Rs. 33,000 and remuneration to Partners is Rs, 1,20,000.

Calculate Total Income and Tax Payable by firm.

5. Explain the following terms : (Any five) r

<!>	Person
(ii)	Capital Asset
(iii)	Business
(iv)	Annual Value
(v)	Transfer
(vi)	Previous Year
(vii)	Salary.

6.    Explain provisions for Deductions/Allowances Exemptions for following :

(i)    Gratuity u/s 10(10)

(ii)    Investments /Paymentsu,s 80.C

(iii)    Depreciation u.s 32,    *

7.    (a) What are provisions for allowance of payments to partners by a Firm ?

(b) Explain the provisions for presumptive taxation relating to Retail Trader.

8.    Write short notes on (any five) :

(i)    Clubbing of Income of Minor Ctiiid

(ii)    Cost Inflation Inolex

(iii)    Double Taxation Relief

(iv)    Rates of Taxation for different categories of individual

(v)    Deemed Owner of House Property.

(vi)    Preliminary Expenditure.

Con. 2303-09.    p-TO'''0(10GJYirsM ""X    &8o5

(3 Hours)    [ Total Marks : 100

N,B. (1) Question No. 1 is compulsory and carries 20 marks

(2)    Attempt any four from the remaining.

(3)    Working to form part of the answers and make and state cioarly assumptions where necessary.

1. The following are Ihe summarised Balance Sheets of H Ltd. as on 31 st March, 2004

Particulars	31-03-2004 Rs,	31-03-2005 Rs.
Liabilities
Eauitv Share Capital	3,00.000	4,00,00
Security Premium Account	-	10,000
Profit and Loss Account	1,00.000	3.00,000
6% Debentures	1,50,000	1,00,000
Profit on Redemption of Debentures	-	2.000
Creditors	1,40,000	t, 10.000
Provision for Taxation	50,000	1,00,000
Proposed Dividend	15,000	20,000
Depreciation Provision	1,40.000	1,50,000
Total	6,95,000	11,92,000
Assets
Plant and Machinery	4.00,000	4,50,000
Shares in Subsidiary Company	20,000	20,000
Property	2,00,000	2,50,000
Loans to Subsidiary Company	-	15,000
Stock	1,40.000	1,50,000
Debtors	1,00,000	1,50,000
Cash	20.000	15,000
Sank	10,000	1,40,000
Prepayments	5,000	2,000
Total	8,95,000	11,92,000

During the year :    ,

(i)    Plant costing Rs. 50,000 (accumulated depreciation thereon being Rs. 30,000 was sold for Rs 10,000. The Loss on Sale has been charged to Profit and Loss a/c.

(ii)    Tax paid for the previous year amounted to Rs. 60,000.

Prepare H Ltd 's Funds Flow statomeni for Ihe year ended 31-3-2005.

You are given the following figures Current Ratio Liquidity Ratio Net Working Capital Slock Turnover Aalio Ratio of Gross Profil and Sales Turnover Ratio to Fixed Assets (not) Average debt collection period Fixed Assets to Net Worth Reserves and Surplus to Capital

Draw up the Balance Sheet of the concern to which the figures relate,

KK Ltd. produces product 'A' by using 2 raw materials 'Xand 'Y and has its unit cost as follows :

Rs.

Raw materia! X    30

Raw material Y    50

Direct wages    30

Overheads    10    I TURN OVER

Other Information :

(i) The goods are sold at a Profit of 20% on Sales.

(Ii) The Raw Material X is purchased from one supplier at a credit of 2 Months,

(iii)    20% of requirement of Raw Material ofY is purchased on Cash basis and balance on a Credit of 3 Months.

(iv)    ft is a practice of the company to keep both the types of Raw Materials in store for 1/2 Month in advance before putting to production.

(v)    Company also keeps Finished Goods for one Month in store before the delivery to customers.

(vi)    Expenses are paid in arrears of 1/2 Month,

(vii)    Projected Sales of Product A for the year 2006-07 is as under :

Rs. 30,00.000 on Cash Basis at the factory Show Room Rs. 12,00,000 on advance payment of 1/2 Month to New Customers Rs. 60,00,000 to associates of which 20% will be on Cash basis and E! a lance 80% on credit for 3 Months.

Rs. 48,00,000 to old customers of which 30% will be on cash basis and Balance 70 % on credit of 2 Months.

Calculate the Working Capital Requirement of KK Lid. for the year 2006-2007 assuming lhat I here will be contingency cash balancc lo cover 10% of the Gross Working Capital excluding Cash.

4, A firm is considering investment in two projects, the amount involved being Rs. 1.39,000 and Rs. 1,75,000. One project will give a profit before depreciation of Rs. 45,000 for six years subject to a tax of Rs. 15,000. The other project will yield a profit ot Rs. 40,000 (before depreciation) subject lo a tax of Rs. 15,000 for 10 years. With the help of the . table given below, calculate the internal rate of return in the two cases.

Present Value of Re. 1 receivable at the end of each ot 10 years.

Year	@ 7%	@ 7.5%	< 8%
1	0.93458	0.93023	0.92593
2	087344	0.B6533	0,85734
3	0.81630	0.80496	0.79383
A	0.76230	0.74880	0.73503
5	0.71230	0.69656	0.68058
6	0.66634	0.64796	0.63017
7	0.62275	0.60275	0.58349
8	0,58201	0.56070	0.54027
9	0.54393	0.52156	0.56025
10	0,50836	0.48519	0.46339

5.    Write short notes (any four) :

(a) Time value based and other methods of Capita! Budgeting (t>) Desirability factor

(c)    Gearing of Capital

(d)    Average Rate ol Return

(e)    Capital Employed.

6,    Compare and contract (any two) :

(a)    Capital Reserve and Reserve Capital

(b)    Own Capital and 'Loan Capital

(c)    'Profitability' and 'Profitability Index.

7,    Explain the differeni ways in which ratios can be classified and which basis of classification you find superior and why ?

8.    "Short term funds should not be used for long term investment in Assets" Explain this with reference to the ratio which is an indicator thereof.

FfVM- OfpbttT/i n\

pjpe-H 6os?c    C jmrb _bb_₈322

[Total Marks : 10tl

N.B.:(1)    Attempt any live questions.

(2)    Figures to right indicate full marks.

(3)    Working notes and assumptions forms part of answer.

(4)    Use of simple calculator Is permitted.

A factory manufactures an article. For which production capacity is 5000 units 20

*    .._________M-h -mriq the mst data is as follows .

Week	Output (Units)	Dlrcct Material	Direct Wages	Factory Ov
1*'	2000	12000	6000	12500
	2800	16800	8400	16500
3 ia	3700	22200	11100	21000

Factory Overhead partly variable.

Administration Overheads, are Rs. 12000 per month.

Selling Costs are 5% of sales.

Profits are estimated 15% of sales.

For the fourth week the output is planned to be 5000 units.

Prepare cost sheet for fourth week and ascertain total sales.

Sanjan Ltd. has two factories. At each factory one product is produced. The

Factory A		Factory B
Product	P	Product	FI
Sales Variable cost Fixed Cost Prolil Output (Units)	5.00.000 3.00.000		10,00,000 8,00,000
	2.00.000		2,00,000
	1.00,000		1,00,000
	1,00,000		1,00.000
	5.000		8,000

Compute for each product /Factory

(a)    P.V. Ratio

(b)    Break Even Point in Value and Unit

(c)    Margin of safety

(d)    Profit if output is Increased by 20%

(e)    Profit if output is reduced by 20%.

A M Ltd. Manufactures two products.

For Month April 2009 expected sales are P,15000 kg and The opening stock The expected claiming stock The labour requirements for each

Unit of P, - Skilled Hours

Unskilled Hours    P Skilled Hours

"     Unskilled Hours

One worker works for 8 hours for 25 days.

The wages Paid to Unskilled Worker Rs. 3000 p.m.

Paid to Skilled Worker Rs 5,000 p.m.

You are required 10 calculate :

(1)    Total labour Cost for P₁ and P₂

(2)    No, of skilled and Unskilled Workers 1o be employed.

I sihaIf-09-nkD 50 Con. 2088-BB-8832-09.

A-1 Industries provides lolloping Cost Data data for Month ended 31st March

2003.

Production Capacity Actual Production Material Cosl Wages Indirect Labour Indirect Materials Electricity Repairs Salaries Insurance Premium Depreciation Sales Commission Office Expenses For April 2009, Company expects Io have output of 6000 Units or 9000 Units. You are to prepare estimate of cost for bolh levels of output and suggest stilling price, so as io have a profit ol 20% on cost. TB Ltd. for system of Standards and Budgets. The plant capacity is 6000 Units p.m. The standard costs are : 5.

Units p.m. Units p.m. Remarks 10000 7500 Rs. 22.500 15.000 11,250 18,750 37.500 3750 12.000 5400 10800 15000 17500    Variable    Variable    40% Fixed    20% Variable    Fixed    Fixed    Fixed    Variable    50% Fixed

---

Material R 3 kg @ Rs. 3 Wages L 4 Hrs. @ Rs. 5 Variable Overhead Fixed Overhead (Cost Rs. 60,000)

During March 2009 actual production was 6300 Units.

The Actual Cost were R Kg 20000 @ Rs. 2'80    ?

L Hrs24000 @ Rs. 5-40    ?

Variable Overhead    66,000

Fixed Overheads    62.000

Calculate Cost Variances with as much detail as possible.

6.    Explain with suitable illustrations following methods of pricing issue of materials.

(a)    First In First Out

(b)    Weighted Average (cj Last In First Out

(d) Simple Average

7.    (a) Explain circumstances when the following products would earn higher profits

(1)    Product with Highnr ds ratio

(i.e PN Ratio)

(2)    Product with Lower c/s Ratio

(i.e. P/V Ratio)

(b) Enlist various decisions taken by Management with assistance 0! Marginal Costing Techniques.

8.    Explain the following : (Any four) ;

(a)    Idle time

(b)    Non-Monetary Incentives for labour (C)    Economic Order Quantity

(d)    Equivalent Production

(e)    Profit on Incomplete Contract (f>    Cash Budget

t))(-3|0nv-1 In PtnCnOaJ managdt-nCfv p->fz r-I - occa- ^3yB-8829S

BB-882900 [ Total Marks : 10(1

(3 Hours)

N.B. (1)    Question No. 1 is compulsory carrying ad marks.

(2)    Attempt any three questions from the rest.

(3)    In all four questions to be attempted.

(4)    "

From the following Trial Balance and additional    ⁴⁰

Particulars

Factory Rent

Olfice Bent

Purchases & Salas

Returns

Wages

Salaries

Workers Welfare Expenses Travelling & Conveyance Telephone & Mobile Expenses Salesman Commission Bad Debts

Reserve for Bad Debts

factory Building

Machinery

Furniture

Motor Car

Debtors/Creditors

Factory Insurance

General Expenses

Power & Fuel

Commission Received

Bank Interest and charges

Selling a Distribution Expenses

Advertise me nt Expenses

Carriage Inward

Cartage

Bank Overdraft

Stock on 1-4-2003 ;

Raw Materials

Finished Goods Drawings Capital Account

Total

Additional Information j

(D    '

(2)    Factory I

(3)    SS:r_d Rs. 89200 as Bad Debts and provide for doubtful

(4)    Depreci ateactory and machinery at 10% and other fixerI assets at 15%.

(5)    Goods costing Rs. 75,200 withdrawn tor personal use have not been recordsc..

in brief the advantages and limitations of Book Keeping and Accountancy. 20

Explain the Vertical Form and Horizontal Form of Profit and Loss Account through 20 illustrations.    I ^TURN

Discuss

4. M/s. Sonal Garments gives    Xctunt wmRs. eSsoa On

StS-KSSiS

on 30-09-06 by spending a¹'¹⁰"*' psed on 1-10-2004 (or Rs. 8.20.000 was

1-10-06. On i-1-2007 a Mach'aeryPased    _was purchased or

^{purchased on 1}

x. sr i⁵ f~⁵ * - ^{h,5 D}"^re*^,"

2008-09,

(b) On Allotment Rs. 3

(o) On 1st Call Rs. 2.50

s: sz-"3 y- -* *^{ma B}-^p,,d -STSw- "> ^,n* ^o" ** ¹  "

sTiSS >-*-*-- >*

ss * -

books of the Company.

found that :    , j _{(h lat we}ek _cf March 09, cheques for

Out of the cheques deposited in    _{jn Fjfs}, _{wee)( Q}j April 2009-

Bs. 2,12,200 and Rs, 89100 were clea    _{Rs 18 12 200 were} not

Oul of cheques issued to parties, cheq

eaKwBSKss*

^{8k c,9}

The balance as per bank Statement    _shekhar's books by preparing

You are required to lind out the balance as P Bank Reconciliation statement for March 2009

1

(a)    Non Trading Organization

(b)    Depreciation Fund Method

(c)    Bad Debts

(d)    Secured Loan

(e)    Outstanding Liabilities

(f)    Accounting Concepts.____

Attachment: university-of-mumbai-2009-diploma-financial-management-51659-1.pdf

Earning:   Approval pending.