Mb0025

ASSIGNMENT MBA Subject code: MB0025 (3 Credits) SET 1 MARKS 60

Financial and Management Accounting   Answer the following question: 1. Explain the differences between Financial Accounting and Management Accounting. 10 Marks 2. Hiran, a retailer, has prepared the following balance sheets for the years ending 31st March 2004 and 2005: Balance Sheets as on 31st March, 2004 and 2005 Particulars

2004

Freehold property at cost Furniture

32000

Less depreciation

23200

2005

200000

200000 30000

8000

20000

10000

Current Assets: Stock

36000

34000

Debtors and prepayments

50000

34000

Cash in hand and at bank

4000

2000

254800

260000

Trade and accrued expenses

24000

20000

Loan account

20000

-------

298800

280000

Liabilities: Capital

Total

Other data: The net profit for the year 2004 was Rs.40000. Hiran is paid a salary of Rs.16,000. His drawings amounted to Rs.45,200. You are required to prepare a statement of changes in financial position, on working capital basis. 3. Enter the following transactions in proper subsidiary book. Find out the total of: a) Purchase book b) sales book c) purchase return book d) sales return book.

10 Marks

Jan 1

Purchase goods from Karthik

34000

5

Sold goods to Vinay

12000

7

Sold goods to Nagaraj

10000

10

Bought goods from Vikas

40000

12

Bought goods from Naveen

14

Vinay returned goods

15

Bought goods from Brinda

100000

18

Returned goods to Karthik

4000

19

Returned goods to Naveen

8000

20

Sold goods to Gururaj worth Rs. 20000 subject to a trade discount of 25%

22

Nagaraj returned goods

25

Bought goods from Anand

102000 3000

2000 45000

10 Marks

4a. On 01-04-2007 Mr. Gundu Rao stated business with Rs. 3, 00,000 cash and opened a bank account with Rs. 1,50,000. He purchased furniture for his business for Rs. 25000. Goods were bought from selvaraj for Rs. 50000 on credit. He sold goods for Rs. 27000 in cash and Rs. 30000 on credit. He paid Rs. 2500 for business expenses during April month. Rs. 10000 was withdrawn for office purpose form the back. Find out the closing balance of cash and bank. 4b.

5 Marks

Following are the extracts from the Trial Balance of a firm as on 31st December 1998: TRIAL BALANCE As on 31st December 1998 Particulars Salaries A/c Rent a/c

Dr.

Cr.

10,000 5,000

Additional Information: I. Salary for the month of December Rs.2000 has not yet been paid. II. Rent amounting to Rs.1000 is still outstanding You are required to pass the necessary adjusting entries and show how the above items will appear in the Firm’s Account

5 Marks

5. From the following figures extracted from the book if Shri Govind, you are required to prepare a Trading and Profit & Loss Account for the year ended 31st March, 1999 and a Balance Sheet as on that date after making the necessary adjustment. Particulars Shri Govind’s Capital

Amount Rs

Particulars

228800 Stock 1.4.1999

Amount Rs. 38500

Shri Govind’s Drawings

13200 wages

35200

Plant and Machinery

99000 Sundry Creditors

44000

Freehold Property

66000 Postage and Telegrams

1540

Purchases Returns Outwards Salaries

110000 Insurance 1100 Gas and Fuel 13200 Bad Debt

1760 2970 660

Office Expenses

2750 Office Rent

2860

Office Furniture

5500 Freight

9900

Discounts A/c (Dr.)

1320 Loose Tools

2200

Sundry Debtors

29260 Factory Lighting

1100

Loan to Shri Krishna @ 10% p.a. –balance on

44000 Provision for D/D

880

1.4.1999 Interest on loan to Shri

1100

Krishna Cash at Bank Biils Payable

29260 Cash in Hand 5500 Sales

2640 231440

Adjustments 1. Stock on 31st March, 1999 was valued at Rs. 72,600 2. A new machine was installed during the year costing Rs. 15,400, but it was not recorded in the books as no payment was made for it. Wages Rs. 1,100 paid for its erection has been debited to wages account. 3. Depreciate: Plant and Machinery by 33 1/3 % Furniture by 10%

Freehold property by 5% 4. Loose tools were valued at Rs. 1,760 on 31.3.1999. 5. Of the Sundry Debtors Rs. 600 are bad and should be written off. 6. Maintain a provision of 5% on Sundry Debtors for doubtful debts. 7. The manager is entitled to a commission of 10% of the net profits after charging such commission. 6. Differentiate between Standard Costing & Budgetary Control

10 Marks 10 Marks

ASSIGNMENT MBA Subject code: MB0025 (3 Credits) SET2 MARKS 60

Financial and Management Accounting 1. From the following details, prepare the balance sheet of the firm concerned. Stock velocity

6

Capital turnover ratio

2

Fixed asset turnover ratio

4

Gross profit

20%

Debt collection period

2 months

Creditors payment period

73 days

The gross profit was Rs.60000. Closing stock was Rs.5000 in excess of the opening stock. 2.

10 Marks

Write short notes with suitable examples on: A. Principles of Income Recognition B. Principles of Full Disclosure

3

10 Marks

The following data have been extracted from the books of M/s Moonshine Industries for the calendar year 2006. Rs

Rs.

Opening stock of raw materials

25,000

Purchase of raw materials

Closing stock of raw materials

40,000

Carriage inwards

85,000

Other direct charges

85,000 5,000

Wages-Direct 75000 Indirect 10000 Rent and rates (Factory)

5,000

Rent and rates (office)

15,000 500

Indirect consumption materials

500

Depreciation- Plant

1,500

Depreciation-office furniture

100

Salary-office

2,500

Other factory expenses

5,700

Salary- salesman Other office expenses Travelling expenses of salesmen

2,000 900 1,100

MD’s remuneration Other selling expenses

12,000 1,000

Sales Advertisement

250000

Advance Income tax paid

15,000

2,000

MD’s remuneration is to be allocated as Rs.4000 to the factory, Rs.2,000to the office and Rs.6,000 to the selling departments. From the above information, prepare a) Prime cost b) Works cost c) cost of production d) cost of sales and e) Net profit. 4. Describe the advantages and limitations of budgetary control.

10 Marks 10 Marks

5. A) A factory is manufacturing sewing machines. The variable cost of each machine is Rs.200 and each machine is sold for Rs.250. Fixed costs are Rs.12000. Calculate the BEP for output. B) Calculate breakeven point and margin of safety. Fixed cost Rs.1,60,000. Variable cost per unit Rs.2 and Selling price per unit Rs.18. Also compute the margin of safety if the company is earning a profit of Rs.36,000. C) Calculate the break-even point and turnover required to earn a profit of Rs.3,600. Fixed overheads Rs.1,80,000. Variable cost per unit Rs. Selling price Rs.20. If the company is earning a profit of Rs.36,000, express the margin of safety available to it. (3+4+3) = 10 Marks 6. From the following particulars compute: (a) materials cost variance (b) materials price variance, and (c) materials usage variance. Quantity of materials purchased

3000 units

Value of material purchased

Rs. 9,000

Standard quantity of materials required Per tonne of output

30 units

Standard rate of materials

Rs. 2.50 per unit

Opening stock of materials

Nil

Closing stock of materials

500 unit

Output during the period

80 tonnes

10 Marks