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.
From the following Balance Sheets of Z. Ltd. prepare a Cash Flow Statement as per AS-3 for the year ended 31 December, 06 by indirect method. (20)
| Liabilities | 2005 Rs. | 2006 Rs. | Assets | 2005 Rs. | 2006 Rs. |
| Equity Share Capital | 2,00,000 | 2,50,000 | Fixed Assets | 3,02,500 | 2,85,000 |
| 10% Pref. Share Capital | 1,00,000 | - | Debtors | 60,000 | 70,000 |
| 5% Debentures (issued on 1-7-2006) | - | 50,000 | Stock | 1,00,000 | 90,000 |
| Capital Redemption Reserve | - | 50,000 | Bank | 45,000 | 30,000 |
| Profit and Loss A/c. | 1,25,000 | 30,000 | Preliminary Expenditure | 30,000 | 20,000 |
| Creditors | 75,000 | 70,000 | - | ||
| Bills Payable | 37,500 | 45,000 | |||
| - | 5,37,500 | 4,95,000 | - | 5,37,500 | 4,95,000 |
Additional Information:
1. Preference Shares were redeemed at 10% premium on 1-7-2006 with half yearly dividend.
2. Fixed assets were purchased for Rs. 97,500 on 1-10-2006.
3. Dividend of Rs. 20,000 on equity shares was paid.
4. Fixed Assets having original cost of Rs. 1,00,000 on which accumulated Depreciation was Rs. 30,000 was sold on 30-9-2006 at Rs. 40,000.
Q.2.
From the following figures, prepare an estimate of the working capital: (16)
| Production | 30,000 units |
| Selling Price per unit | Rs. 10 |
| Raw Material | 60% of selling price |
| Direct wages | 1/6th of raw material. |
| Overheads | Twice the Direct wages |
| Material in hand | 2 months requirement |
| Production time | 1 month |
| Finished goods in stores | 3 month |
| Credit for material | 2 month |
| Credit allowed to customers | 3 month |
| Average cash balance | Rs. 40,000 |
Wages and overheads are paid in the beginning of next month. In production all the material are charged in the initial stage and wages and overheads accrue evenly.
Q.3.
Prepare a funds flow statement from the following details presented to you by Anand Chemical Ltd. (16)
| Liabilities | 2006 Rs. | 2007 Rs. | Assets | 2006 Rs. | 2007 Rs. |
| Share Capital | 4,00,000 | 5,00,000 | Land and Building | 4,00,000 | 3,80,000 |
| Reserves | 1,00,000 | 1,20,000 | Plant and Machinery | 3,00,000 | 3,40,000 |
| Profit and Loss A/c. | 50,000 | 60,000 | Goodwill | - | 10,000 |
| Bank Loan | 1,40,000 | - | Working Capital | 50,000 | 20,000 |
| Provision for Taxation | 60,000 | 70,000 | - | - | |
| - | 7,50,000 | 7,50,000 | - | 7,50,000 | 7,50,000 |
Q.4.
Following is the Balance Sheet of Abhijeet Ltd. as on 31st March, 2006. (16)
| Liabilities | Rs. | Assets | Rs. |
| Equity Share Capital | 3,90,000 | Cash in Hand | 15,000 |
| 10% Preference Share Capital | 2,00,000 | Cash at Bank | 90,000 |
| 9% Debenture | 2,50,000 | Preliminary Expenses | 20,000 |
| General Reserve | 60,000 | Goodwill | 1,00,000 |
| Capital Reserve | 50,000 | Building | 3,00,000 |
| 11 % Bank Loan | 1,00,000 | Investment (Long-Term) | 2,00,000 |
| Creditors | 1,25,000 | Furniture | 2,50,000 |
| Bank Overdraft | 1,35,000 | Plant and Machinery | 3,00,000 |
| Provision for Tax | 1,40,000 | Debtors | 1,50,000 |
| Proposed Dividend | 30,000 | Prepaid Expenses | 50,000 |
| Profit and Loss A/c | 1,40,000 | Stock | 2,00,000 |
| Depreciation provision | 80,000 | Calls in arrears (Equity) | 10,000 |
| - | Commission on Issue of Shares | 15,000 | |
| 17,00,000 | - | 17,00,000 |
Present the above Balance Sheet in vertical form and show the following:
1. Net worth.
2. Borrowed Fund.
3. Capital Employed.
4. Net Block.
5. Working Capital.
6. Fictitious Assets.
Other Details:
1. Company paid dividend at 11.5% on opening capital.
2. New shares were issued to a vendor for the business sold by him comprising stock Rs. 40,000 and Machinery Rs. 50,000.
3. Machinery purchased for cash Rs. 60,000.
4. Depreciation written off during the year: Building Rs. 20,000 and Machinery Rs. 35,000.
5. Old Machinery was sold during the year at a Profit of Rs. 5,000.
6. Income Tax paid during the year Rs. 54,000.
Q.5.
Rearrange above data of Petrol Ltd. In suitable form for analysis and calculate Trend Percentage and offer your comments. (16)
| Year | Fixed | Investments | Current | Preliminary | Total | Owner's | Term | Debenture | Total |
| - | Assets | - | Assets | Expenses | Assets | Fund | Loan | - | Liabilities |
| 2000 | 20 | 10 | 40 | 5 | 75 | 20 | 20 | 35 | 75 |
| 2001 | 22 | 9 | 30 | 4 | 65 | 20 | 20 | 25 | 65 |
| 2002 | 24 | 8 | 20 | 3 | 55 | 20 | 20 | 15 | 55 |
| 2003 | 26 | 7 | 30 | 2 | 65 | 40 | 20 | 5 | 65 |
| 2004 | 28 | 6 | 40 | 1 | 75 | 60 | 15 | 0 | 75 |
Q.6.
Following are the financial statements of two similar companies: (16)
| Liabilities | X Ltd. Rs. | Y Ltd. Rs. | Assets | X Ltd. Rs. | Y Ltd. Rs. |
| Share Capital | - | - | Land and Building | 1,400 | 1,200 |
| Equity Share of Rs. 10 each | 4,000 | 4,000 | Plant | 4,100 | 3,200 |
| Revenue Reserve | 1,950 | 1,600 | Stock | 2,850 | 2,100 |
| 8% Debenture | 1,000 | 1,000 | Debtors | 2,600 | 1,900 |
| Trade Creditors | 2,800 | 1,400 | Investment (Long Term) | - | 300 |
| Other Creditors | 250 | 200 | Bank | 100 | 300 |
| Provision for Tax | 900 | 700 | Deposit | 150 | 100 |
| Proposed Dividend | 300 | 200 | - | ||
| - | 11,200 | 9,100 | - | 11,200 | 9,100 |
| - | X Ltd. | Y Ltd. | - | X Ltd. | Y Ltd. |
| Cost of Sales | 10,800 | 9,000 | Sales | 15,000 | 12,000 |
| Operating Expenses | 2,900 | 2,000 | - | - | - |
| Taxation | 550 | 410 | - | - | - |
| Net Profit after Tax | 750 | 590 | - | - | - |
| - | 15,000 | 12,000 | - | 15,000 | 12,000 |
On the basis of above information. You are required to compute separately the following ratio:
1. Capital Gearing Ratio.
2. Current Ratio.
3. Debtors Turnover Ratio.
4. Return on Proprietory Fund.
Vertical final accounts need not be prepared.
Q.7.
From the following information find out missing figures and rewrite the Balance Sheet: (16)
Current Ratio 2:1
1. Acid Test Ratio 5:3
2. Reserves and Surplus are 50% of Equity Share Capital.
3. Long Term Debts are 60% of Equity.
4. Stock Turnover Ratio 10 times.
5. Gross Profit Ratio on sales 20%.
6. Sales are Rs. 15,62,500 (25% Cash Sales and balance on credit)
7. Closing stock is Rs. 50,000 more than Opening Stock.
8. Accumulated Depreciation is 1/6 original Cost of Fixed Assets.
| Liabilities | Rs. | Assets | - | Rs. |
| Equity Share Capital | ? | Fixed Assets (at cost) | ? | - |
| Reserves and Surplus | ? | Less: Accumulated Depreciation | ? | ? |
| Long Term Loans | 9,00,000 | Stock | - | ? |
| Bank Overdraft | 50,000 | Debtors | - | 2,00,000 |
| Creditors | ? | Cash | - | ? |
| - | ? | - | - | ? |
Q.8.
Complete the following common size Income Statement: (16)
| Particulars | Rs. | % |
| Gross sales | 9,90,000 | ? |
| Less: Sales Return | ? | 10 |
| Net Sales | ? | ? |
| Less :Cost of Sales | ? | 40 |
| Gross Profit | ? | ? |
| Less : Operating expenses | - | - |
| (a)Administrative Expenses | ? | ? |
| (b)Finance Expenses | ? | 2 |
| (c)Selling and Distribution Expenses | 72,000 | ? |
| Operating Net Profit | ? | ? |
| Add Non Operating Income | 45,000 | ? |
| Less: Non Operating Expenses | ? | 15 |
| Net Profit before Tax | ? | 30 |
Q.9.
(a)Working Capital is Rs. 90,000. Total Debt are Rs. 1,95,000. Long Term Debt are Rs. 1,50,000.
Stock is Rs. 37,500. Prepaid Expenses are Rs. 7,500. Calculate Liquid Ratio. (3)
(b) Find out Funds from operations from the following: 3
| Net Profit after tax and appropriations | Rs. 1,00,000 |
| Transfer to General Reserve | Rs. 25,000 |
| Proposed Dividend | Rs. 15,000 |
| Provision for Income Tax | Rs. 10,000 |
| Depreciation w/off | Rs. 25,000 |
| Profit on sale of Fixed Assets | Rs. 10,000 |
(c) Write short notes on any two: (10)
1. Trading on Equity.
2. Operating Cycle.
3. MIS Report.
4. Limitations of Ratio Analysis.
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