Master of Business Administration - MBA Semester 1 Subject Code MB0041 Subject Name Financial and Management Accounting 4 Credits

ts (Book ID: B1130) Assignment Set- 1 (60 Marks) Note: Each question carries 10 Marks. Answer all the questions. Q.1 Assure you have just started a Mobile store. You sell mobile sets and currencies of Airtel, Vodaphone, Reliance and BSNL. Take five transactions and prepare a position statement after every transaction. Did you firm earn profit or incurred loss at the end? Make a small comment on your financial position at the end. Ans:Particulars Stock Debtors Cash Capital Creditors Hand set vouchers Started business with cash 40000 40000 purchased nokia handsets 25000 -25000 purchased BSNL and Reliance recharge vouchers 5000 -5000 sold a handset for 6000 costing 5850 -5850 6000 150 Sold recharge vouchers of 1500 profit 6% -1500 1590 90 Puchased a second hand cell on crerdit 3000 3000 sold a handset for 10000 costing 9150 -9150 10000 850 Repair work of the second hand set -1000 -1000 Sold the hand set for 5000 -3000 5000 2000 Sold a hand set on credit for 10000 costing 9500 on credit -9500 10000 500 Realised 70% from the customer -7000 7000 Customer became bad debt -3000 -3000 500 3500 0 38590 39590 3000 42590 42590

Q2a. List the accounting standards issued by ICAI. Ans:ACCOUNTING STANDARDS AS No Title Recommendary or Mandatory Mandatory from accounting period beginning on or after AS-1 Disclosure of Accounting Policies Mandatory 1.4.1991 AS-2 Valuation of Inventories Mandatory 1.4.1999 AS-3 Cash Flow Statement Mandatory 1.4.2000 AS-4 Contingencies and events occurring after the Balance Sheet date (revised) Mandatory 1.4.1995 AS-5 Prior Period and extraordinary items and changes in Accounting Policies Mandatory 1.1.1987 AS-6 Depreciation Accounting (revised) Mandatory 1.4.1995 AS-7 Accounting for construction contracts Mandatory 1.4.1991 AS-8 Accounting for Research and Development Mandatory 1.4.1991 AS-9 Revenue Recognition Mandatory 1.4.1991 AS-10 Accounting for Fixed Assets Mandatory 1.4.1991 AS-11 Accounting for the effects of changes in foreign exchange rates (Revised) Mandatory 1.4.1995 AS-12 Accounting for Government Grants Mandatory 1.4.1994 AS-13 Accounting for Investment AS-14 Accounting for Amalgamation Mandatory 1.4.1995 AS-15 Accounting for retirement benefits in the financial statement of employers Mandatory 1.4.1995 AS-16 Borrowing Costs Mandatory 1.4.2000 AS-17 Segment Reporting Mandatory 1.4.2001 AS-18 Related party disclosure Mandatory 1.4.2001 AS-19 Leases Mandatory 1.4.2001 AS-20 Earnings Per Share Mandatory 1.4.2001 AS-21 Consolidated financial statement Mandatory 1.4.2001 AS-22 Accounting for taxes on income Mandatory 1.4.2001

AS-23 Accounting for investments in associates in consolidated financial statements Mandatory 1.4.2002 AS-24 Discontinuing operations Mandatory 1.4.2002 AS-25 Interim financial reporting Mandatory 1.4.2002 AS-26 Intangible assets Mandatory 1.4.2003 AS-27 Financial reporting of interests in joint venture Mandatory 1.4.2002 AS-28 Impairment of assets Mandatory 1.4.2004 AS-29 Provisions, Contingent Liabilities & Contingent Assets Mandatory 1.4.2004 AS-30 Financial Instruments: Recognition, Measurement and Limited Resources Mandatory from 1.4.2011 1.4.2009 AS-31 Financial Instruments: Presentation Mandatory from 1.4.2011 1.4.2009 AS-32 Financial Instruments: Disclosure and limited revision to AS 19 (leases) Mandatory from 1.4.2011 1.4.2009 AS 8 was withdrawn in pursuant to AS 26 becoming mandatory. 29 accounting standards are issued as of date and only 28 is applicable. AS 30, 31, 32 are published but they will come into effect from 1.4.2009. It is mandatory on or after 1.4.2011

Q 2b. Write short notes of IFRS. Ans:- International Financial Reporting System: IFRS are standards, interpretations and framework for the preparation and presentation of financial statements. IFRS was framed by International Accounting Standards Board (IASB). The objective of financial statement is to provide information about the financial position, performance and changes in the financial position of an entity. It should also provide the current financial status of the entity to all the users of financial information. IFRS follows accrual basis of accounting and the financial statements are prepared on the basis that

an entity will continue for the foreseeable future. IFRS helps entities access global capital market with ease. Under IFRS, we need to submit a statement of financial position (Balance Sheet), Comprehensive income statement (Profit & Loss/ Income and Expenditure account), either a statement of changes in equity or statement of recognized income or expenses, cash flow statement and notes including summary of significant accounting policies.

Q.3 Prepare a Three-column Cash Book of M/s Thuglak & Co. from 20X1 Jan 1. Cash in hand Rs. 50,000, Bank Overdraft Rs. 20,000 2. Paid into bank Rs. 10,000 3. Bought goods from Hari for Rs, 200 for each 4. Bought goods for Rs. 2,000 paid cheque for them, discount allowed 1% 5. Sold goods to Mohan for each Rs. 1.175 6. Received a cheque from Shyam to whom goods were sold for Rs. 800.Discount allowed 12.5% 7. Shyams cheque deposited into bank 8. Purchased an old typewriter for Rs. 200 , Spent Rs. 50 on its repairs 9. Bank notified that Shyams cheque has been returned dishonored and debited the account in respect of charges Rs. 10 10. Received a money order Rs. 25 from Hari 11. Shyam settled his account by means of a cheque for Rs. 820, Rs. 20 being for interest charged. 12. Withdrew from the bank Rs. 10,000 18. Discounted a B/E for Rs. 1,000 at 1% through bank 20. Honored our own acceptance by cheque Rs. 5,000 22. Withdrew fir personal use Rs. 1,000 24. Paid tread expenses Rs. 2,000 25. Withdrew from bank for private expenses Rs. 1,500

26. Purchased machinery from Rajiv for 5,000 and paid him by means of a bank draft purchased for Rs. 5,005 27. Issued cheque to Ram Saran for cash purchased of furniture Rs. 1,575 28. Received a cheque for commission Rs. 500 from R.& Co. and deposited into bank 29. Ramesh who owned us Rs. 500 became bankrupt and paid us 50 paise in the rupee 30. Received payment of a loan of Rs. 5,000 and deposited Rs. 3,000 out of into bank 31. Paid rent to landlord Mohan by cheque of Rs. 220 31. Interest allowed by bank Rs. 30 31. Half-yearly bank charges Rs. 50

Ans;Dr In the books of M/s Tuglak& Co. Cash Book Cr Date Partriculars LF VN Cash Bank Disc Date Partriculars LF VN Cash Bank Disc 2011 2011 1-Jan To, Balance B/d 50000 1-Jan By, Balance B/d 20000 2-Jan To, Cash 10000 2-Jan By, Bank 10000

5-Jan To, Mohan 1175 3-Jan By, Hari 200 6-Jan To, Shyam 700 100 4-Jan By, Purchase 1980 20 7-Jan To, Cash 700 7-Jan By, Bank 700 10-Jan To, Hari 25 8-Jan By, Typewriter 250 11-Jan To, Shyam 820 9-Jan By, Shyam 700 12-Jan To, Bank 10000 9-Jan By, Charges 10 18-Jan To, Bills Receivable 990 12-Jan By, Cash 10000 28-Jan To, Commission 500 20-Jan By, Bills Payable 5000 29-Jan To, Ramesh 250 22-Jan By, Drawings 1000 30-Jan To, Loan Repayment 2000 3000 24-Jan By, Trade Exp 2000 31-Jan To, Interest 30 25-Jan By, Drawings 1500 26-Jan By Machinery 5005 27-Jan By, furniture 1575 31-Jan By, Rent 220 31-Jan By, Bank Charge 50 31-Jan To, Balance c/d 29750 31-Jan By, Balance c/d 49750 63900 46040 100 63900 46040 20