SKR Engineering College 2007 M.C.A Accounting

b) From the subsequent forecasts of Income and Expenditure of Golden & Co Ltd, prepare a cash budget for 6 months commencing from first June 2004 when the bank balance is estimated to be Rs. 1,10,000.


Month Sales Selling O/H Purchases Wages Factory O/H Admin O/H
March 82000 5000 40000 10000 8400 3400
April 88500 3250 37000 8000 5680 2500
May 84000 4100 40000 8400 5920 2760
June 93000 3710 39000 8800 5440 2480
July 72000 3210 39900 6000 5880 2600
August 82500 3600 35000 9600 6000 2520
September 98600 3450 36400 8000 5680 2700
October 92800 3210 36574 84000 5360 2560
November104400 3200 32800 7600 5850 2620
Lag Pay two Mon one Mon three Mon ½ Mon one Mon ½ Mon

Additional info
A Sales commission of 5% on sales and due 2 months after sales is payable in addition to selling overheads.
Capital expenditure planned is
a) Plant purchased in June 2004 for Rs 1,00,000 payable on delivery
b) Building purchased in June 2004 for Rs 8,00,000 payable in 4 half yearly installments, the 1st being payable in July 2004.
Interest on Bombay Port Trusts Bond amounting to Rs 50000 is to be received in October 2004.
Cash sales are estimated at Rs 2000 per Month.
A dividend of Rs 10000 is to be paid in September 2004.
Tax amounting to Rs 30000 is to be paid on first August 2004.
A call on equity capital of Rs 500000 is to be received on first July 2004.(10 marks)
The cost of an article at a capacity level of 5000 units is provided under beneath. For a variation of 25% capacity above or beneath this level, the individual expenses vary as indicated under below:


Particulars Amount Rs
Material cost 25000
Labour Cost 15000
Power 1250
Repairs and Maintenance 2000
Stores 1000
Inspection 500
Depreciation 10000
Admin Overheads 5000
Selling Overheads 3000
Cost Per unit Rs 12.55. (6 Marks)

14) a) explain the advantages and disadvantages of Pay back period, Accounting rate of Return and Discounted Cash Flow techniques. (or)
b) A Company is considering an investment proposal having initial cost Rs 50,000. The estimated life of the asset is five Years and the tax rate is 35%. The company is subsequent 10% straight-line method of depreciation policy. The estimated profit before depreciation and tax are as follows


Year Profit before Depreciation & Tax
1 10000
2 10692
3 12769
4 13462
5 20385

compute the subsequent
Pay back Period
avg. Rate of Return
Internal Rate of Return
NPV at 10% of discount rate
Profitability Index at 10% discount rate


15) a) discuss the theories of Capital Structure. (or)
b) Differentiate Traditional, Walter, and Gordon & MM theory of Dividend Policies.

Earning:   Approval pending.