NRJ/KW/17/6738

Master of Business Administration (M.B.A.) Semester—I (C.B.C.S.) Examination

ACCOUNTING FOR MANAGERS
Compulsory Paper—3
Time : Three Hours] [Maximum Marks : 80
N.B. :— (1) ALL questions are compulsory.
(2) All questions carry equal marks (16 marks each).
1. (A) Elaborate the accounting concepts and conventions with suitable examples.
OR
(B) Distinguish between Capital Expenses and Revenue Expenses.
2. (A) What do you mean by ‘Statutory Audit’ ? Discuss the various provisions of Statutory Audit
as per Companies Act, 2013.
OR
(B) The following is the Trial Balance of Saurashtra Ltd. as on 31st March 2015 :
Debit Bal. Amt. (` ) Credit Bal. Amt. (` )
Premises 90,000 Unsecured Loan 8,000
Plant & Machinery 1,50,000 Bills Payable 12,000
Stock (1.4.2014) 40,700 Share Capital 2,20,000
Fixtures 10,000 Sales 1,65,000
Furniture & Fittings 12,000 6% Debentures 40,000
Debtors 21,000 Creditors 14,800
Cash in Hand 4,100
Purchases 70,000
Salaries 10,000
Wages 30,600
Carriage Inwards 4,300
General Expenses 2,700
Directors Fees 3,000
Bad Debts 200
Debenture Interest 1,000
Preliminary Exp. 2,000
Vehicles 8,200
4,59,800 4,59,800
Prepare a statement of P/L for the year ended 31/3/2015 and a Balance Sheet as on that date
as per the Revised Schedule VI after considering the following adjustments :
(a) Depreciate Plant and Machinery @ 10%, Fixtures @15%, Furniture @10% and
Vehicles @ 20% p.a.
(b) Out of the debtors ` 1,000 are bad. Provide 5% reserve for doubtful debts.
(c) Outstanding Expenses — Wages ` 1,200, Salaries ` 800 and General Expenses ` 400.
(d) Stock as on 31/3/2015 is valued at ` 41,000.
(e) Write off ` 500 from preliminary expenses.

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3. (A) From the following Balance Sheets of Ramanuj Ltd. prepare Cash Flow Statement :
Particulars Note 31/3/2012 31/3/2011
No. ` `
I Equity and Liabilities :
(1) Shareholder’s Funds :
(a) Share Capital 1 2,50,000 2,25,000
(b) Reserves & Surplus 2 2,60,000 1,15,000
(2) Current Liabilities :
(a) Trade Payables 49,500 37,500
(b) Short-term Provisions 3 50,000 40,000
Total 6,09,500 4,17,500
II Assets :
(1) Fixed Assets :
(a) Tangible Assets 4 2,80,000 2,40,000
(b) Intangible Assets 5 20,000 36,000
(2) Current Assets :
(a) Inventory 15,000 10,000
(b) Trade Receivables 2,84,500 1,19,000
(c) Cash & Cash Equivalents 10,000 12,500
6,09,500 4,17,500
Notes :
31/3/2012 31/3/011
(1) Share Capital :
Equity Share Capital 2,00,000 1,50,000
Preference Share Capital 50,000 75,000
2,50,000 2,25,000
(2) Reserves & Surplus :
General Reserve 1,25,000 70,000
P/L Balance 1,35,000 45,000
2,60,000 1,15,000
(3) Short Term Provisions :
Provisions for Tax 50,000 40,000
(4) Tangible Assets :
Building 1,80,000 2,00,000
Plant 1,00,000 40,000
2,80,000 2,40,000
(5) Intangible Assets :
Goodwill 20,000 36,000
Additional Information :
(1) Depreciation charged on Plant and Building ` 10,000 and ` 60,000 respectively.
(2) Income tax paid during the year amounted to ` 43,000.
OR
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 (B) The following information is given to you :
Current Ratio 2.5
Liquidity Ratio 1.5
Net Working Capital ` 3,00,000
Gross Profit Ratio 20%
Reserve : Share Capital 0.5 : 1
Stock Turnover Ratio (Cost of Sales/Closing Stock) 6 Times
Average Debt Collection Period 2 Months
Fixed Assets : Shareholder’s Net Worth 1 : 1
Calculate :
(1) Share Capital
(2) Reserves
(3) Long-term Debt
(4) Current Liability
(5) Fixed Assets
(6) Inventory
(7) Debtors
(8) Cash.
4. (A) A company expects to have ` 37,500 cash in hand on 1st April 2016 and require you to
estimate the cash position during the three months, April to June, by preparing a Cash
Budget :
The following information is supplied to you :
Amount (` )
Overheads
Sales Purchases Wages Factory Office S&D
Revenue
February 75,000 45,000 9,000 7,500 6,000 4,500
March 84,000 48,000 9,750 8,250 6,000 4,500
April 90,000 52,500 10,500 9,000 6,500 5,250
May 1,20,000 60,000 13,500 11,250 6,000 6,570
June 1,35,000 60,000 14,250 14,000 7,000 7,000
Additional Information :
(a) Period of credit allowed by suppliers is two months.

(b) 20% of the sales is for cash and the period of credit allowed to customers for credit
sales is one month.

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 (c) Lag in payment of all expenses : one month.

(d) Income tax ` 57,000 is due in June.

(e) Dividends and bonus ` 15,000 and ` 22,500 respectively to be paid in April.

(f) An amount of ` 1,20,000 is to be paid in May for Plant.

OR

(B) ABC Ltd. manufactures a single product which is in great demand. The present sales of
` 60,000 per month utilize only 60% capacity of the plant. The sales manager articipates
that with a reduction of 10% in the price, the sales would go up by 25% to 30%. The
following data is available :

Selling Price — ` 10 per unit

Variable Cost — ` 3 per unit

Semi-variable Cost — ` 6,000 Fixed Plus ` 0.50 per unit

Fixed Cost — ` 20,000 at present level, estimated to be ` 24,000 at 80% output.

You are required to submit a statement showing the operating profits at 60%, 70% and 80%
levels at current selling price and at proposed selling price.

5. (A) Write a note on ‘Trial Balance’.

(B) Distinguish between ‘Fixed Assets’ and ‘Current Assets’.

(C) What are the objectives of preparing a ‘Cash Flow Statement’ ?

(D) Write a note on ‘Sales Budget’.

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