14-mba-r5-financial Accounting And Analysis

R5

Code No: R5-14/MBA

MBA-I Semester Supplementary Examinations, July/Aug 2008. FINANCIAL ACCOUNTING AND ANALYSIS Time: 3hours

Max. Marks: 60 Answer any FIVE questions All questions carry equal marks ---

1. Describe the Accounting principles and conventions. Why is it important to have Accounting Standards? 2. Describe the Accounting process in detail. 3. On 1st July, 2004 Ram and Mohan purchased a second hand machine for Rs.18,000 and spent Rs.2,000 on its repair and installation. On 30th June 2007, the machinery was disposed off for a sum of Rs.13,600. Assuming the books are closed on 31st December each year and assuming the rate of depreciation is 10% per annum on the diminishing balance, show Machinery Account. 3. What is goodwill? Describe the different methods of calculation of goodwill. 4. A company issues 10,000 shares of face value of Rs.10 each, payable Rs.3 on allotment, Rs.2 on First call and Rs.2 on Final call. All the shares are subscribed and duly allotted and both the calls are made. All cash is duly received, except the final call on 200 shares. These are subsequently forfeited by the Directors and are resold as fully paid for Rs.500. Give entries necessary to record these transactions in the company’s journal. 6. What is the significance of financial statement analysis? What are the advantages and disadvantages of financial statement analysis? 7. From the following particulars prepare cash Flow Statement of Mr. Kumar

Cash

1st Jan Rs. 5,000

31st Dec Rs. 4,000 Contd..,2

Code No: R5-14/MBA

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Debtors Stock Land Building Machinery

40,000 30,000 30,000 50,000 70,000 _________________ 2,25,000 _________________

45,000 25,000 40,000 55,000 80,000 _______________ 2,49,000 ________________

Current liabilities Loan from Mrs. Subha Bank Loan Capital

35,000 40,000 1,50,000 _________________ 2,25,000 _________________

40,000 25,000 30,000 1,54,000 _______________ 2,49,000 ________________

During the year, Mr. Kumar brought an additional capital of Rs.10,000 and his drawings during the year were Rs.31,000. Provision for depreciation on machinery – opening balance Rs.30,000, closing balance Rs.40,000.Prepare Cash flow statement. 8. Using the following data, complete the Balance sheet below: Gross Profit (20% of Sales) Shareholders equity Credit Sales to Total Sales Total Assets turnover Inventory turnover ( to cost of sales ) Average collection period ( 360 days a year ) Current Ratio Long term debt to equity Liabilities Net worth Long term debt Creditors

Balance Sheet Rs. Assets Cash Debtors Inventory Fixed Assets

Total

Total

$$$

Rs.60,000 Rs.50,000 80% 3 times 8 times 18 days 1.6 40% Rs.