Time: 3Hours Marks: 100
N.B:
1. Questions No. 1 is compulsory and carries 20 marks.
2. Attempt any five from the rest questions,each carrying 16 marks
from remaining questions.
3. Working notes should form part of your answer.
4.Proper presentation and neatness is essential.
5. Use of simple calculator is allowed
Q.1.
Certain items of the annual accounts of AB Ltd. are missing as shown below: (20)
| Particulars | Amount Rs. | Particulars | Amount Rs. |
| To Opening Stock | 4,37,500 | By Sales | ? |
| To Purchases | ? | By Closing stock | ? |
| To Direct Expenses | 1,09,375 | ||
| To Gross Profit | ? | ||
| Total | ? | Total | ? |
| To Administrative Expenses | 2,66,000 | By Gross Profit | ? |
| To Interest on Debentures | 37,500 | By Commission | 62,500 |
| To Provision for Taxes | ? | ||
| To Net profit After Tax | 3,30,000 | ||
| Totalv | ? | Total | ? |
| Liabilities | Amount Rs. | Assets | Amount Rs. |
| Profit and Loss Account | 1,34,375 | Stock | ? |
| (Including Opening Balance) | Debtors | ? | |
| 10% Debentures | ? | Bank Balance | 78,000 |
| Creditors | ? | ||
| Proposed Dividend (C.Y.) | ? | ||
| Provision for Taxes (C.Y.) | ? | ||
| Total | ? | Total | ? |
You are required to complete the Financial Statements with the help of the following information :
Current ratio is 2 : 1.
Stock turn over ratio is 1.60
Proposed dividends are 25% of share capital.
Gross profit ratio is 50%.
Transfer to General Reserve is 70% of proposed dividends.
Provision for Taxes is 50% of profit after tax.
There is no opening balance in General Reserve Account.
Creditors' turn over ratio (on purchases and closing creditors) is 10 : 2
Q.2.
From following information given by Tata Ltd. estimate working capital requirement for year ending 31st March, 2009: (16)
| PER | CAR RATE | |
| STEEL | 1000 KG | Rs. 70 per kg. |
| SPARES | 20 KG | Rs. 60 per kg. |
| ENGINE | 1 Rs. | 20,000 per engine |
| LABOUR | 50 HRS | Rs. 100 per hr. |
| OVERHEAD | Rs. 20,000 |
(1) Steel remains in stock for two months, spares remains in stock for half month and engine remains in stock for one month.
(2) Suppliers of steel allows credit of two months, suppliers of spares allow credit for one month and suppliers of engine allows credit for half month.
(3) Production process takes half month.
(4) Time lag in payment of labour and overhead is one month.
(5) Car (finished goods) remains in stock for one month.
(6) Activity is spread evenly throughout the year.
Q.3.
Balance Sheets of Star Ltd. for the year ended 31st December, 2006 and 31st December, 2007 16 are as follows :- (16)
| Liabilities | 31st Dec. 06 Rs. | 31st Dec. 07Rs. | Assets | 31st Dec. 06 Rs. | 31st Dec. 07Rs. |
| Equity Share Capital | 8,00,000 | 8,00,000 | Building | 6,00,000 | 5,40,000 |
| 10% Pref. Share Capital | 6,00,000 | 6,00,000 | Land | 2,00,000 | 2,00,000 |
| General Reserves | 4,00,000 | 4,90,000 | Plant | 6,00,000 | 5,40,000 |
| 15% Debentures | 2,00,000 | 3,00,000 | Furniture | 2,00,000 | 2,80,000 |
| Creditors | 3,00,000 | 4,00,000 | Stock | 4,00,000 | 6,00,000 |
| Bills Payable | 1,00,000 | 1,50,000 | Debtors | 4,00,000 | 6,00,000 |
| Tax Payable | 2,00,000 | 3,00,000 | Cash | 2,00,000 | 2,80,000 |
| 26,00,000 | 30,40,000 | 26,00,000 | 30,40,000 |
Prepare Comparative Balance Sheet in vertical form and offer your comments in brief on fixed Assets.
Q.4.
From the following Balance Sheet and information of SNEHAL LTD. prepare fund flow statement and schedule of item-wise changes in working capital for the year ended 31st December, 2006 and 2007. (16)
| Liabilities | 2006 Rs. | 2007 Rs. | Assets | 2006 Rs. | 2007 Rs. |
| Equity Share Capital | 9,00,000 | 12,00,000 | Fixed Assets | 18,80,000 | 13,40,000 |
| (Rs. 100 each) | Trade Investment | 3,00,000 | 3,00,000 | ||
| 7% Preference Share | 8,00,000 | 6,00,000 | Stock | 3,40,000 | 4,50,000 |
| Capital (Rs. 100 each) | Sundry Debtors | 5,30,000 | 8,50,000 | ||
| General Reserve | 3,90,000 | 1,90,000 | Cash and Bank Bal | 2,30,000 | 4,50,000 |
| Profit and Loss A/c. | 3,10,000 | 5,00,000 | |||
| Capital Reserve | - | 20,000 | |||
| Security Premium | - | 10,000 | |||
| 10% Debenture | 4,00,000 | 2,00,000 | |||
| Creditors | 1,80,000 | 3,40,000 | |||
| Bills Payable | 70,000 | 40,000 | |||
| Provision for Tax | 2,30,000 | 2,90,000 | |||
| 32,80,000 | 33,90,000 | 32,80,000 | 33,90,000 |
Additional Information for the Year 2007:
1. On 31st December, 2007 accumulated Depreciation on Fixed Assets was Rs. 4,80,000 and 31st December, 2006 was Rs. 3,60,000. Machinery costing Rs. 4,20,000 included in Fixed Assets (W.D.V. Rs. 2,60,000) sold for Rs. 1,80,000.
2. During the year Investment costing Rs. 1,00,000 were sold and profit on sale was credited to Capital Reserve.
3. Tax paid during the year amounted to Rs. 2,50,000.
4. Issued 1,000 Equity Shares to the public at a premium of Rs. 10 per Share and Balance indicate Bonus issue out of General Reserve.
5. Dividend received on Investment was Rs. 30,000 out of which Rs. 10,000 was for a period prior to purchase of Investment.
Q.5.
From the following information prepare the Common size Revenue Statement with Amount and % for the year ended on 31st March, 2007 in a vertical form suitable for analysis : (16)
| Particulars | % on net sales of Rs. 5,00,000 |
| Opening stock | 2 |
| Closing stock | 3 |
| Purchases | 52 |
| Office expenses | 4.75 |
| Other administrative expenses | 5.75 |
| Distribution expenses | 6 |
| Selling expenses | 4 |
| Interest (Dr.) | 1.50 |
| Indirect wages | 1.50 |
| Direct Wages | 2 |
Provision for Income tax is to be made @ 25% on net profit before tax.
Q.6.
From the following Balance Sheets of XYZ Ltd. as on 31-3-2006 and 31-3-2007, prepare cashflow statement for the year ended 31-3-2007 as per AS-3 by indirect method: (16)
| Liabilities | 31-3-06 Rs. | 31-3-07Rs. | Assets | 31-3-06Rs. | 31-3-07Rs. |
| Equity Share Capital | 45,00,000 | 12,00,000 | Land | 15,00,000 | 11,50,000 |
| General Reserve | 3,00,000 | 5,00,000 | Machinery | 13,50,000 | 28,70,000 |
| Capital Reserve | - | 3,00,000 | Investments | 9,00,000 | 7,00,000 |
| Profit and Loss A/c. | 3,00,000 | 4,00,000 | Stock | 14,00,000 | 16,00,000 |
| Creditors | 6,00,000 | 9,00,000 | Debtors | 9,00,000 | 13,50,000 |
| Provision for Tax | 5,00,000 | 5,50,000 | BillsReceivable | 2,45,000 | 2,90,000 |
| Proposed Dividend | 3,95,000 | 4,50,000 | Cash/Bank Balance | 3,00,000 | 3,90,000 |
| 65,95,000 | 83,50,000 | 65,95,000 | 83,50,000 |
Additional Information for the year ended 31st March, 2007:
(1) During the year Machinery was sold for Rs. 2,00,000 (W.D.V. Rs. 2,25,000).
(2) During the year Depreciation provided on Machinery was Rs. 3,00,000.
(3) Profit on sale of land was transferred to Capital Reserve.
(4) Interim Dividend paid during the year Rs. 2,00,000
(5) Profit on sale of Investment was transferred to General Reserve.
(6) Income tax paid during the year 2007 is Rs. 4,50,000.
Q.7.
Profit and Loss A/c. and Balance Sheet of SIDHARTH LTD. for the year ended 31st March, 2007: (16)
| Trading, Profit and Loss Account for the year ended 31st March 2007 | |||
|---|---|---|---|
| Particulars | Rs. | Particulars | Rs. |
| To Opening Stock | 70,000 | By Sales | 9,00,000 |
| To Purchases | 5,40,000 | By Closing Stock | 80,000 |
| To Wages | 2,14,000 | ||
| To Gross Profit c/d. | 1,56,000 | ||
| 9,80,000 | 9,80,000 | ||
| To Salaries | 26,000 | By Gross Profit b/d. | 1,56,000 |
| To Rent | 5,000 | By Interest on investment | 5,000 |
| To Miscellaneous Expenses | 15,000 | ||
| To Selling Expenses | 10,000 | ||
| To Depreciation | 30,000 | ||
| To Interest | 5,000 | ||
| To Provision for Tax | 20,000 | ||
| To Net Profit c/d. | 50,000 | ||
| 1,61,000 | 1,61,000 |
| Balance Sheet as on 31st March, 2007 | |||||
|---|---|---|---|---|---|
| Liabilities | Rs. | Assets | Rs. | Rs. | |
| Equity Share Capital (Rs. 10) | 1,50,000 | Fixed Assets | 1,60,000 | ||
| 8% Preference Share Capital | 1,30,000 | 1,00,000 | (Less:)Depreciation | 30,000 | 1,30,000 |
| Reserve and Surplus | 62,000 | investment | 1,00,000 | ||
| 10% Debenture | 50,000 | Stock | 80,000 | ||
| Bank Loan (Payable after 5 years) | 40,000 | Debtors | 60,000 | ||
| Creditors | 60,000 | Bills Receivable | 50,000 | ||
| Provision for Tax (C. Y.) | 20,000 | Cash | 85,000 | ||
| Bank Overdraft | 20,000 | Preliminary Expenses | 5.000 | ||
| Proposed Pref. Dividend | 8,000 | ||||
| 5,10,000 | 5,10,000 |
Note : Market value of Equity share is Rs. 12 and Dividend paid per Equity share is Rs. 2.
Calculate the following ratio :
(a) Acid Test Ratio.
(b) Capital Gearing Ratio.
(c) Operating Ratio.
(d) Dividend Payout Ratio.
(e) Debt Service Ratio.
(f) Creditors Turnover Ratio.
(g) Earning per Share.
(h) Stock Turnover Ratio.
Note: Vertical final accounts need not be prepared.
Q.8.
From the following information of Mahindra Ltd. for the year ended 31st March, 2006 and 31st March 2007, you are required to comment with the help of comparative statement after rearranging in Vertical Form suitable for analysis (16)
| 2006 Rs. | 2007 Rs. | |
| Sales | 15,20,000 | 22,80,000 |
| Return Inward | 20,000 | 30,000 |
| Opening Stock-Raw Material | 7,600 | 7,600 |
| Purchases of Raw Material | 3,90,000 | 5,85,000 |
| Work in Progress-Opening | 10,000 | 10,000 |
| Work in Progress-Closing | 10,000 | 15,000 |
| Closing Stock-Raw Material | 7,600 | 11,400 |
| Power | 50,400 | 75,600 |
| Depreciation on Machinery | 70,000 | 1,05,000 |
| Repairs Factory Building | 40,000 | 60,000 |
| Direct Labour | 2,50,500 | 3,75,750 |
| Selling and Distribution Expenses | 1,05,400 | 1,58,100 |
| Finance Expenses | 70,000 | 70,000 |
| Administrative Expenses | 73,500 | 73,500 |
Q.9.
(a) State wheather following is True or False: (5)
i) Payment for purchase of computer will reduce working capital.
ii) As per Standard Current Ratio, Current Assets of a concern must always be equal to its Current Liabilities.
iii) Fund Flow Statement shows movement of cash during the year.
iv) Proprietory Ratio shows turnover of fixed asset during the year.
v) Operating Expenses Ratio and Operating Ratio are same.
(b) From each of the following sets, state the odd one out clearly :- (5)
i) Selling Expense, Financial Expense, Direct Expense, Administration Expense.
ii) Packing charges, Commission on Sales, Advertisement, Rent paid รข€“ Office.
iii) Opening Stock, Purchases, Purchase Returns, Commission received.
iv) Fuel Expenses, Carriage outward, Wages paid, Carriage on purchases.
v) Advertisement, Commission paid, Interest received, Royalty paid for Manufacture.
(c) Write short notes on : (any two) (6)
i) Capital Gearing Ratio
ii) Working Capital Cycle
iii) Enumerate MIS Reports
iv) Limitations of Financial Statements.
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