Tuesday, February 17, 2009

March 2005

Management Accounting
March 2005

Time: 3Hours                                       Marks: 100
NB:
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. Brijesh started business by introducing capital of Rs. 1,00,000 on 1-4-2004. He has taken Term Loan from Bank of India of Rs. 4,00,000 at 12% interest & purchased premises of Rs. 3,00,000 & Furniture & Equipment of Rs. 1,50,000. His projected Trading & Profit & Loss Account for the first year ended 31st March, 2005 is as follows :-

 Rs.Rs. Rs.  Rs. 
To Opening Stock --By Sales  
To Purchases       Cash Sales1,70,000 
   Cash Purchases50,000  Credit Sales8,50,000 
   Credit Purchases6,50,000  10,20,000 
 7,00,000 Less : Returns20,00010,00,000
Less : Returns10,0006,90,000By Closing Stock 50,000
To wages 60,000   
To Gross Profit c/d. 3,00,000   
  10,50,000  10,50,000
To Administrative Expenses 60,000By Gross Profit b/d 3,00,000
To Selling Expenses 1,00,000By Profit on sale of Equipment  5,000
To Interest on Bank Loan 48,000(Cost of Equipment sold Rs. 20,000)  
To Depreciation on Equipment 30,000   
To Net Profit  67,000    
 Total 3,05,000 Total  3,05,000

Prepare Cash Flow Statement for the year ended 31st March,2005 as per AS-3& calculate cash & Bank Balance as on that date. Use Indirect Method. Balances on 31stMarch, 2005 expected are Debtors Rs. 1,50,000. Creditors Rs.50,000. Last quarter Interest on Bank loan is not yet paid.
Reconcile your answer by preparing projected Balance Sheet (invertical form) as at 31st March, 2005.   
 Q.2.The Balance Sheets of Chetan Ltd.as at 31st March, 2003 & 2004.16 


 31-3-2003 Rs.31-3-2004Rs.
Equity Share Capital (shares ofRs. 10 each fully called)10,00,00014,50,000
Less: Calls-in-Arrears
(Rs. 2 per share)		5,000--
 9,95,00014,50,000
Add: Share Forfeiture Balance (Rs. 8 per share)8,0001,600
Paid up Equity Capital 10,03,00014,51,600
8% Redeemable Preference Share Capital5,00,0004,00,000
Securities Premium1,00,00040,000
Capital Reserve (Net profit on Forfeited Shares reissued)--16,500
General Reserves2,47,0003,49,000
Profit & Loss Account1,50,0007,42,900
Loans5,00,00010,00,00
 
 25,00,00040,00,000
Fixed Assets (At cost Less Dep.)12,00,00020,00,000
Investments3,00,0004,00,000
Working Capital10,00,00016,00,000
 25,00,00040,00,000

  Other Information :-  (1) During the year Equity shares on which calls were in arrears have been forfeited.  (2) Part of the forfeited
shares have been reissued at Rs. 7 per share.  (3) Bonus shares are issuedby using securities premium of Rs. 60,000 and General 
Reserve of Rs. 1,40,000.  (4) Depreciation on Fixed
Assets for the year was Rs. 1,80,000. 
 (5) Investments costing Rs.75,000 were sold at Rs. 1,00,000/  Prepare Fund Flow Statement for the year ended 31st March, 2004.    
Q.3.From the following information, you are required to prepare a Balance-Sheet in Horizontal form :16 
Current Ratio 1.75
Liquid Ratio1.25
Stock Turnover Ratio9 times (Based on Closing
Stock)
Gross Profit Ratio25%
Debtors collection period1.5 months
Reserves and surplus to share capital0.2
Cost of Goods sold to Fixed
Assets		1.2
Capital Gearing (Long term Loans to Share Capital)0.6
Fixed Assets to shareholders Funds 1.25
Sales for the year (All are on Credit Basis)Rs.
12,00,000
Current Assets consisted of Cash, Stock & Debtors only. The company has not issued pref. shares. There are no Bank Overdraft & Fictitious Assets.    Q.4.Maza Ltd. was formed and incorporated on 1st April, 2002. You are given following trial balance as on 31st March, 2003 & 31st March, 2004. You are required to prepare vertical statement for both the years in columnar form.16
 
 31stMarch, 200331stMarch, 2004
 Dr. (Rs.)Cr. (Rs.)Dr. (Rs.)Cr. (Rs.)
Land and Building 25,50,000--25,50,000--
 
Machinery5,50,000--8,00,000--
 Furniture 2,00,000--3,00,000--
Sundry Debtors3,00,000--5,00,000--
Cash & Bank Balance1,00,000--1,00,000-- 
 
Sundry Creditors--2,00,000--3,00,00
Outstanding Expenses--20,000--20,000
Sales--20,00,000--30,00,000
Purchases12,00,000--15,00,000--
Opening Stock----3,00,000-
Admin. Expenses2,76,000--3,70,000-- 
P/L Opening Bal.------7,44,00
Selling Expenses80,000--1,10,000-- 
Share Capital--20,00,000-- 20,00,000
 Unsecured Loan--10,36,000--4,66,000
 52,56,00052,56,00065,30,00065,30,000
  Adjustment : (1) Closing Stock as on 31 st  March, 2004 is Rs.4,00,000.    Q.5.a)  Horizon Ltd. engaged in the following transactions. Identify whether it is(a) an Operating  (b) an Investing(c) a Financing (d) none of the above.5 
(1) Dividend paid.
(2) Interest paid. 
(3) Issued long term bonds.
(4) Purchased long term investment.
(5) Equipment sold. 
(6) Dividend received on shares held.
(7) Purchased land. 
(8) Received cash from customers.
(9) Wages paid to workers. 
(10) Issued bonus shares out of general reserves.  b) Given below are some of the information of Parekar Ltd. as on 31st March, 2004.


Rs.
Debtors30,000
Outstanding Manufacturing Exp.17,000
Cash Balance23,000
Bills Payable & Creditors38,000
Machinery (Imported)30,000
Income earned but not received 6,000
Bank Overdraft15,000
 Bills Receivable7,000
Prepaid traveling expenses4,000
Using above data calculate current ratio and liquid ratio and comment on it.6  c) Calculate Return on Capital employed and Return on Proprietor’s Fund from following information.
   Rs.
Equity Capital3,00,000
General Reserves4,00,000
Profit & Loss A/c1,50,000 (Cr.)
Sundry creditors2,00,000
Operating Profit 3,50,000 (Before Interest & Tax)
 
Long Term Loan2,00,000 (at 12% p.a.Interest)
Tax Rate is 30%. 
5   Q.6.Chinmag is carrying on trading business in India and gives the following information.
(1) Estimated sales in year Rs. 12,00,000.
(2) His Administrative & Selling expenses are estimated as fixed expenses Rs.2,000 per month and variable expenses equal to 5% of his turnover.
(3) He expects to fix sale price for each product which will be 25% in excess
of his cost of purchase.
(4) He expects to turnover his stock four times in the year.
(5) The sales & Purchases will be evenly spread throughout the year. 20% of sales will be on cash and balance on credit and allowed 2 months credit. He also expects one month credit from his suppliers.
(6) Cash Balance = Fixed and variable expenses for one month.16 Calculate his average working capital and prepare his income statement for the year.    Q.7.Vinod Honorable Ltd. presents you with their summarized Profit & Loss A/c with the request to convert the same into a common size statement in vertical form after incorporating the information given there under & briefly comment on it.16 Profit and Loss Account for the
year ended 31-12-2004  



ParticularsRs.Particulars Rs.
 
To Opening Bal. B/d.1,00,000By Sales10,00,000
To Opening Stock : Raw Material Finished goods2,00,000 1,50,000By Dividend received2,00,000
To Purchases :Raw Material
Finished goods		3,50,000 60,000By Closing Stock : Raw Material Finished goods2,00,000 3,00,000
To Manufacturing Exp. 1,00,000  
To Establishment Exp.2,82,000  
To Interim Dividend35,000 
 
To Provision for Tax75,000  
To Audit fees2,500  
To Directors Fees2,000  
To Preliminary Expenses5,000  
To Salaries & Wages1,00,000  
To Depreciation on :Delivery Van    
Building for Office		1,000 1,500  
To Int. on Secured Loan10,000  
To Selling & Distribution Exp.75,000  
To Loss on Sales of Fixed Assets10,000  
To Transfer to General Reserve10,000  
To Proposed Dividend55,000  
To Balance c/d76,000  
 17,00,000 17,00,00

  Other Information : Establishment expenses include a sum of Rs. 12,000 written-off as bad debts.   
 Q.8.Complete the following comparative statement of Mahesh Pvt. Ltd. by ascertaining the missing figures and underline the missing figures ascertained.16 





Particulars2003 Rs. 2004 Rs. Absolute Increase/Decrease Rs. Increase/Decrease%
Sales6,00,000?+3,00,000?
Cost of Goods Sold : Opening Stock ?60,000+10,000?
Purchases4,00,000?+80,000?
Closing Stock ????
Cost of Goods Sold??+97,500+25%
Gross Profit ????
Operating Expenses    
(a) Administrative Exp.40,000??+100%
(b) Financial Exp.60,00072,000??
(c) Selling Exp.?1,50,000+1,00,000+200%
Total Operating Exp.????
Net Profit Before Tax60,0001,10,500??
Provision for Tax????
Net Profit after Tax36,000?+27,000+75%
    Q.9.  Write note on any four:16 a) Liquid Assets.  b) Contingent Liabilities.  c) Cash Flow v/s Fund Flow.  d) Trading on equity.  e) Debtors Turnover Ratio & Creditors Turnover Ratio.  f ) Selection of Accounting Software.
Posted by at No comments:

October 2004

Management Accounting
October 2004

Time: 3Hours                                       Marks: 100
NB:
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.
Following are the Balance Sheets of C Ltd. as at 31st March,2003 and 31st March,2004:
Liabilities 31-03-03 Rs.31-03-04 Rs.Assets 31-03-03 Rs. 31-03-04 Rs.
Equity Share Capital 65,0001,00,000 Land & Buildings (At cost)29,000 45,000
Profit & loss Account25,000 37,400 Furniture (At cost) 16,000 11,000
Sundry Creditors99,999 1,11,111 Motor Vehicle (At cost) 20,000 41,000
Bills Payable 20,001 18,889 Investments(Long Term) 52,100 46,600
Accumulated Depreciation :-- Inventory 62,500 97,600
Land & Building 12,0009,000Book Debts39,90034,100
Furniture6,0005,600Cash in hand17,500 23,700
Motor Vehicle 9,00017,000---
Total 2,37,000 2,99,000 Total 2,37,000 2,99,000


Additional Information:
i) Building costing Rs. 19,000 accumulated depreciation thereon being Rs. 8,000 was sold for Rs. 25,000.
ii) No furniture was purchased during the year, however, part of the furniture on which accumulated depreciation provided Rs. 1,000 was sold for Rs. 2,500.
iii) Investments are recorded in the books at cost price. Part of the investments being worthless were written off during the year.
You are required to prepare:
(a) Statement showing in detail, item-wise increase and decreases in working capital.
(b) Statement of sources and Application of funds.
(c) Other working notes.

Q.2.
Following financial statements are of XYZ Ltd. for 2004 (16)
Trading and Profit Loss A/c for the year ended 31st March, 2000.
Particulars Rs. Particulars Rs.
To opening stock 70,000 By Sales16,60,000
To Purchases 15,00,000By Closing Stock1,60,000
To Gross Profit 2,50,000--
- 18,20,000-18,20,000
To Depreciation 36,000By Gross Profit2,50,000
To Other Expenses74,000By Commission10,000
To Tax Provision40,000--
To Proposed Dividend16,000--
To Net Profit94,000-
- 2,60,000-2,60,000


Balance Sheet as at 31st March 2004
Share Capital 3,00,000 Cash 48,000
Bank Overdraft 38,000 Stock 1,60,000
Creditors 34,000 Debtors 1,38,400
Provision for Depreciation 54,000 Land and Building 92,000
Provision for tax 40,000 Machinery1,28,600
Proposed Dividend 16,000 Goodwill20,000
Profit & Loss A/c1,80,000Loan and Advance 60,000
--Preliminary Expenses15,000
- 6,62,000-6,62,000


Re-arrange the above in a vertical form & also calculate:
(a) Stock Turnover Ratio.
(b) Debtors Turnover Ratio.
(c) Creditors turnover Ratio.

Q.3.
From the following Balance Sheets as on 31st March, 2003 & 31st March, 2004 of M/s Dhoom Pvt. Ltd. prepare common Size Financial Statements in vertical form. (16)
Liabilities2003Rs. 2004 Rs. Assets 2003 Rs. 2004 Rs.
Share Capital 4,00,000 5,00,000 Fixed Assets 5,40,000 6,72,000
General Reserve 20,000 40,000Investments 1,30,00090,000
Profit & Loss A/c 50,000 60,000 Stock 90,000 85,000
12% Debentures 1,00,000 1,50,000 Debtors 25,00045,000
Creditors 1,35,00045,000 Bills Receivable -- 35,000
Proposed Dividend 40,00050,000 Cash 10,000 5,000
Provision for Tax 60,000 80,000Bank8,000--
Bank Overdraft-- 10,000 Misc. Expenditure 2,000 3,000
Total8,05,0009,35,000Total8,05,0009,35,000


Q.4.
From the following Trial Balance of Jyoti Ltd. as on 31st March, 2004, prepare vertical Revenue Statement for the year ended 31st March, 2004 & vertical Balance Sheet as on that date after making the necessary adjustments: (16)
Particulars Rs. Rs.
Equity Share Capital-11,00,000
Plant & Machinery12,00,000-
Sales-37,00,000
Purchases17,00,000-
Sundry Debtors9,00,000-
Sundry Creditors-8,50,000
Wages 3,50,000-
Opening Stock 1,20,000-
Salaries1,80,000-
Advertisement 75,000-
Telephone Charges35,000
Furniture2,00,000-
Investments (Long Term)5,00,000-
Interest Received-40,000
Loss on Sale of Furniture 20,000-
Commission 60,000
Profit & Loss A/c-1,20,000
Interim Dividend50,000
General Reserve- 1,00,000
Cash at Bank3,20,000
Bills Receivable 2,00,000-

Adjustments:
(1) Stock on 31st March, 2004 was valued at Rs. 3,00,000.
(2) Make Provision of Rs. 3,00,000 for Income Tax.
(3) Depreciate Plant & Machinery @ 20% & Furniture @ 10%.

Q.5.
Aryan ceremics is going to produce and sale 5000 units per month in the year 2004. (16)
The material required per unit is Rs. 550. The direct Labour is Rs. 12,00,000 per month. The expenses are Rs. 1,26,00,000 p.a. The sale price is fixed by calculating profit at 20% on sale price.
Calculate requirement of working capital for 2004 by taking into consideration following information:
(1) Stock of raw material will be two months.

(2) Process time is one month.

(3) Stock of finished goods will be 1.5 months.

(4) Credit allowed to 50% customer’s two months on acceptance of bill & balance 50% customers given one month credit.

(5) 25% of expenses are paid one month in advance & balance 75% is paid after one month.

(6) Time lag in payment of wages is one month.

(7) 20% of material is purchased on cash basis & suppliers of 80% material give 1.5 months credit.

(8) Cash required is 15% of net working capital.


Q.6.
Complete the following comparative statement of Swaraj Pvt. Ltd. by ascertaining the missing figure. (16)
Comparative Balance Sheet as on 31st December

Particulars 2002 Rs. 2003 Rs. Absolute Increase or Decrease Rs. % Increase or Decrease Rs.
(A) SOURCES OF FUNDS----
Equity Share Capital 1,20,000 1,20,000 - -
Reserves & Surplus 20,000 48,000 ? ?
OWNER’S FUNDS 1,40,000 1,68,000 ? ?
BORROWED FUNDS:----
10% Debentures ??--
TOTAL FUNDS AVAIABLE (A) 1,60,000 2,00,000 ? ?
(B) APPLICATION OF FUNDS:----
(a) Fixed Assets 80,000 ? ? +75%
(b) Working Capital: ----
(i) Current Assets:----
Inventories 50,000? (-) 10,000 ?
Receivables ?56,000 (-) 40,000 ?
Cash ? 24,000 (-) 6,000 ?
Total Current Assets 1,40,000 1,20,000 (-) 20,000?
(ii) Current Liabilities----
Creditors ? ?--
Working Capital (i-ii) 80,00060,000 ? ?
APPLICATION OF FUNDS (B) (a+b) 1,60,000 2,00,000 ? ?


Q.7.
You are required to prepare cash flow statement as per AS-3 for the year ended 31-12-03 from following Balance Sheet as on 31st December and additional information of ATKT Ltd. (16)

Liabilities2002Rs. 2003Rs. Assets 2002 Rs. 2003 Rs.
Share Capital 5,00,0007,50,000Building 1,00,0002,90,000
Share Premium 50,00075,000 Machinery 90,0002,70,000
Profit & Loss A/c --13,000 10% Investment 1,00,0001,00,000
12% Debentures 1,00,0001,00,000 Stock 3,70,000 2,94,000
Creditors 80,00050,000Debtors58,000 49,000
Bank Overdraft-- 10,000Advance Tax 5,00060,000
Tax provision 6,000 68,000 Cash 5,000 6,000
Bad Debts Provision 4,000 6,000 Bank Balance A/c6,000 --
O/s Debenture Interest 6,000 3,000 Profit & loss A/c 7,000 --
- --Share Issue Expenses5,000 --
Total 7,46,000 10,75,000 Total 7,46,000 10,75,000


Additional Information:

(1) Share issue expenses incurred in the year Rs. 2,500.
(2) Depreciation provided on Building Rs. 10,000 & Machinery Rs. 20,000

Q.8.
(a) State with reasons whether the following statements are True or False:(10)
(1) The term ‘Flow’ refers to the movement of funds between two Balance Sheets dates.
(2) Higher Stock to Working Capital Ratio is an indication of lower investment in stock.
(3) Cash Flow Statement is now mandatory.
(4) When closing stock is overvalued Gross Profit Ratio for that year increases.
(5) Current Ratio ignores the quality of Working Capital.

(b)Write short notes (any two):

(1) Seasonal working capital
(2) Common Size Financial Statements.
(3) Window Dressing of Current Ratio.

Q.9.
Complete the following Statement of changes in Working Capital:(16)
Pitamber Ltd.
Changes in Working Capital
Particulars30-09-2003 (Rs.)30-09-2004 (Rs.) Increase (Rs.) Decrease (Rs.)
(A) CURRENT ASSETS----
Stock in Trade ? ? 3,90,000 ?
Cash at Bank1,50,000? - 50,000
Total (A) ??--
(B)CURRENT LIABILITIES ----
Sundry Creditors ? ?- ?
Bills Payable 1,00,000 ? - 50,000
Total (B) ? ?--
Working Capital (A-B) ? 4,00,000--
Increase in Working Capital1,00,000---
- ? ?? ?


Additional Information:
(1) Current Ratio of the company on 30th September, 2003 is 2:5:1 and on 30th September, 2004 it is 2:1.
(2) Liquid Ratio of the Co. on 30th September, 2004 is 1:5:1.
Posted by at No comments:

March 2004

Management Accounting
March 2004

Time: 3Hours                                       Marks: 100
NB:
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.
Following are the Balance Sheets of Swaraj Ltd. as on 31st Dec. 2002 and 31st Dec. 2003 respectively.
Balance Sheet
Liabilities 2002 Rs. 2003 Rs. Assets 2002 Rs. 2003 Rs.
Equity Share Capital 3,00,0006,00,000 Goodwill 10,000 5,000
Reserves1,12,000 1,82,600 Land ( At Cost ) 3,00,000 3,85,000
Profit & Loss A/c. 37,700 75,700 Plant & Machinery 2,10,000 3,00,000
11% Debentures 2,25,000 - ( At Cost )--
Sundry Creditors 1,67,300 1,72,700 Long Term Investment 1,67,000 1,83,000
Bills Payable 16,000 9,000 ( At Cost )--
Outstanding Expenses12,00024,000Stock In Trade27,000 43,000
Bank Overdraft-5,000Sundry Debtors1,31,000 1,34,000
---Bills Receivable16,000 11,000
---Prepaid Expenses3,000 2,000
- -- Cash at Bank6,000 -
- -- Share Issue Expenses - 6,000
Total8,70,000 10,69,000 Total 8,70,000 10,69,000


Additional Information :

(1)Balance of Accumulated Depreciation Account as on 31st December 2002 and 31st December 2003 has been included in the balance of 'Reserves" as on 31st December 2002& 31st December 2003 respectively.
(2)Verification of Fixed Assets Register of the Co. reveals that the Co. purchased its first Plant & Machinery on 1st January 2002 for Rs. 2,10,000 and 2nd on 1st July 2003 for Rs. 90,000.
(3)In the year 2003 Investment costing Rs. 27,000 were sold for Rs. 36,000.
(4)Co. provides depreciation @ 20% p.a. on Plant and Machinery under Diminishing Balance Method.
(5)One-third of share issue expenses were written off during the year 2003.

You are required to prepare :
(a)Schedule of changes in Working Capital [Together with itemwise changes (increases or decreases) in working capital].
(b)Statement of Sources and Applications of Funds for the year ended 31st December, 2003.

Q.2.
"Cosmos India Ltd."
Balance Sheet as on 31st December, 2003
LiabilitiesRs. Assets Rs.
Capital Reserve 1,26,000 Copyright 1,00,000
General Reserve 1,20,000 Cash 21,000
Provision for Tax 50,000 Calls in Arrears 9,575
Commission received in Adv. 10,875 Plant & Machinery 4,20,000
15% Debentures 1,60,000 Debtors 3,00,425
12% Bank Loan 40,000 Prepaid Insurance 15,375
6% Pref. Share Capital2,00,000Land & Building5,00,000
Equity Share Capital 10,00,000Fixtures25,000
Bills Payable49,125Furniture 75,000
Profit and Loss A/c. 9,000 Preliminary Expenses 18,625
Bank Overdraft 10,740 Goodwill1,00,000
Share Premium15,000Investments (Long Term)1,75,000
Sundry Creditors 1,89,260 Stock 2,00,700
- - Marketable Investments 19,300
- 19,80,000 -19,80,000


You are required to rearrange the above Balance Sheet in vertical form and compute the following ratios:
(a)Current Ratio
(b)Proprietory Ratio
(c)Capital Gearing Ratio

Q.3. Following Trial Balance was extracted from the books of Castalloys Pvt. Ltd. for the year ended 31st Dec. 2003. (16)


ParticularsRs. Particulars Rs.
Land & Building90,000Sundry Creditors 30,600
Plant & Machinery 1,65,600 Reserves 15,000
Furniture & Fittings 3,600 Profit & Loss A/c 1-1-2003 8,800
Preliminary Expenses 4,900 Bank Overdraft 11,180
Calls in arrears (at Rs. 20 per share) 2,500 Return Outwards 5,000
Cash in hand 500 Sales 3,07,800
5% Govt. Bonds (F.V. 10,000) 9,880 Share Capital 2,00,000
Bills Receivable 23,000 6% debentures 1,00,000
Delivery Van 3,000 --
Goodwill 16,000--
Sundry debtors 20,800--
Purchases 2,40,000 --
Advertising 2,540--
Sales Return 7,000 --
Legal Charges 1,000--
Carriage Inwards3,700--
Wages 23,200--
Rent, Rates and Insurance 2,900--
Stock 1-1-2003 47,600 --
Prepaid Expenses 2,800 --
Trade Expenses1,500--
Repairs to Plant & Machinery 860 --
Interim Dividend paid3,500--
Salaries2,000-
-6,78,380- 6,78,380


You are required to prepare Profit & Loss account and Balance Sheet in Vertical Format as per Management Accounting after taking into consideration the following adjustments:
(1) Charge 5 % Depreciation on Plant and Machinery, 7.5% on Furniture & Fittings and 20% on Delivery Van.
(2) Closing stock was Rs. 54,200 as on 31st December, 2003
(3) The Directors have proposed a final dividend of 6% on paid up share capital.
(4) Interest on Govt. Bonds and Debentures is due for the year 2003.

Q.4.
Complete the following Comparative Statements of DT Ltd. by ascertaining the missing balances. (16)


Particulars2002Rs.2003 Rs.Absolute Increase or Decrease % Increase or Decrease
(A) Sales ? ? (+)4,00,000 +25.00%
Cost of goods sold ----
Opening Stock 80,000 1,20,000 ? ?
Purchases ? ? (+)2,00,000 +20.00%
Wages 2,40,000 4,40,000 ? ?
Less: Closing Stock ? 1,60,000 ? ?
(B) Cost of goods sold ? ? ? ?
(C) Gross Profit (A-B) ? ? ? ?
Less: Operating Expenses ----
a.Administrative ? ? (+)20,000 +20.00%
b. Selling 50,000 60,000 ? ?
c. Finance ? ? (+)4,500 +22.50%
(D) Total Operating Expenses ? ? ? ?
Net Operating Profit (C-D) ? ? ? ?
Add : Non-Operating Income20,0001,00,000??
Net Profit before Tax ? ? ??
Less : Provision for Tax ????
Net Profit after Tax2,10,0002,35,000 ??


Q.5.
From following details, prepare working capital estimate for 2004:

Raw Material - Rs. 125 per unit
Fixed Wages - Rs. 9,00,000 per annum
Variable wages - Rs. 40 per unit
Fixed Overheads - Rs. 6,60,000 per annum
Variable Overheads - Rs. 9 per unit
Level of activity of purchases production and sales - 60000 units per annum

Other Information :

(1) Raw Material stock 1.5 months
(2) Process time 1 month & to include fixed wages & overheads full, variable wages & overheads 40 %
(3) Finished goods stock 1 month.
(4) M.R.P. of the product is arrived at by calculating 20 % profit on sales price.
(5) 25 % of the sales are to wholesalers giving them 10% discount. Credit given to 40% wholesalers two months against acceptance of bill and balance one month credit.
(6) Balance sales to retailers. Half of it on cash basis by giving 2% discount, balance half on one month credit
(7) Cash required 15% of net working capital.
(8) For material purchases we accept bill for two months for 25% of quantity and for balance we receive credit for 1.5 months.
(9) Fixed wages are paid 1/2 month in advance.
(10) Fixed overheads are paid 1 month in advance.
(11) Variable wages time lag is one month.
(12) Variable overheads time lag is half month.

Q.6.

(A) Current Liabilities and Current Assets of D. K. Ltd. were as under: (12)
Current Liabilities Rs.Current Assets Rs.
Creditors 1,00,000 Stock (at cost) 75,000
Bank Overdraft 25,000 Debtors 1,25,000
Total Current Liabilities Rs. 1,25,000 Total current Assets Rs. 2,00,000


Note: The Co. can avail the overdraft facility upto Rs. 75,000.

Explain in detail the effects of the following transactions on Current Ratio and Working Capital of the Co.Consider each transaction separately. (Do not give cumulative effects of the transactions)
(1) Purchased Goods worth Rs. 25,000 and issued a cheque of Rs. 25,000 against the said purchases.
(2) Received a cheque of Rs. 30,000 from one of the customers and deposited the same into Bank in overdraft A/c.
(3) Sold Goods costing Rs. 25,000 for Rs. 35,000 on credit.
(4) Bills Receivable of Rs. 15,000 which was discounted in the Bank is now dishonoured.

(B)
Gross Profit Ratio of Jyoti Ltd. for the year 2002 was 25% and in the year 2003 it came down to 15%. What could be the reasons for decrease in Gross Profit Ratio of the Co. (Give only Four Reasons) .(4)

Q.7.
Following are Balance Sheets of Rudraksha Ltd. as on 31st Dec. 2002 & 31st Dec 2003.

LIABILITIES31-12-2002 Rs. 31-12-2003 Rs. ASSETS31-12-2002 Rs. 31-12-2003 Rs.
Equity Share Capital 12,00,000 16,00,000 Land & Building 4,04,000 4,32,000
10% Pref. Share Capital 8,00,000 6,00,000 Machinery 8,40,000 10,20,000
12% Debentures 1,00,000 50,000 Goodwill 50,000 40,000
Profit & Loss A/c 3,70,000 3,04,000Patents60,00048,000
Other Reserves1,04,000 1,90,000 Investments 8,02,000 8,02,000
Share Premium 20,000 60,000 Inventory 5,70,000 6,74,000
Creditors 1,80,000 2,00,000 Debtors 2,60,000 2,92,000
Bills Payable24,00070,000 Prepaid Expenses 8,000 10,000
Bank Overdraft - 18,000 Cash Balance20,0004,000
Prov. for Taxation76,00080,000Advance Tax60,00070,000
Proposed Dividend -----
Equity Share1,20,0001,60,000---
Preference Share 80,000 60,000 - --
-30,74,00033,92,000 - 30,74,00033,92,000


Other Information :

(1) Liability for taxation for the year 2002 amounted to Rs. 65,000.
(2) Machinery having w.d.v, of Rs. 22,000 was sold at profit of Rs. 3,000 and new machinery purchased at Rs. 2,30,000
(3) Equity shares are issued @ 15% premium
(4) Preference shares were redeemed at a premium of 10%
(5) Debentures were redeemed at a premium of 10%.

You are required to prepare Cash Flow Statement for the year ended 31st Dec. 2003.

Q.8.
Complete the following Balance Sheet from the information given below :(16)
Balance Sheet as on 31st December, 2003
Liabilities Rs.Assets Rs.
Equity Share Capital ? Fixed Assets ?
(of Rs. 100 each) - - -
Reserve & Surplus? Current Assets -
10% Debentures 400,000Stock ?
Current Liabilities - Debtors?
Sundry Creditors ? Other Current Assets?
Other Current Liabilities 200,000 --
-?-?


Following information is available :

(1)Sales for the year Rs. 48 lakhs
(2)Gross Profit Ratio 25%
(3)Net Profit after tax Rs. 2,00,000
(4)Purchases and Sales on credit basis.
(5)Debtors Turnover Ratio 12 times (Sales/Debtors).
(6)Creditors Turnover Ratio 12 times (Cost of Sales/Creditors)
(7)E.P.S. Rs. 20 per share
(8)Stock Turnover Ratio 10 times
(9)Debt Equity Ratio 0.25 : 1
(10)Current Ratio 1.6. : 1.

Q.9.
(A) State True or False (with reasons): (12)

(1)All Current liabilities are quick liabilities.
(2)Contingent liabilities do appear in the Balance sheet.
(3)Floating assets means fixed assets.
(4)Intra firm analysis involves analysis of performance of two different organisations.
(5)Decrease in sale price without corresponding decrease in cost of good sold increases gross profit ratio.
(6)Payment of cash to creditors will improve Current ratio.

(B) Write short notes (any one):(4)

(1)Benefits of using computers for MIS.
(2)Factors determining working capital.
(3)Window Dressing of Current Ratio.
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