Nr R5 14 Mba Financial Accounting And Analysis

Code No: NR/R5-14/MBA

NR/R5

M.B.A. I-Semester Examinations, January-2008. FINANCIAL ACCOUNTING AND ANALYSIS Time: 3 hours Max Marks: 60 Answer any FIVE questions Any question carry equal marks --1. What are various accounting concepts? Explain any four of them. 2.

The following is the Trial Balance of Mr. Rajesh as on March 31, 2007. Prepare Trading and Profit and Loss account for the year ended 31.3.2007 and a Balance Sheet as on that date. Debit Balance Amount Credit Balance Amount Drawings 72,000 Capital 4,00,000 Buildings 60,000 12% Bank Loan 60,000 Furniture and 30,000 Sales 4,00,000 fittings Motor Van 1,00,000 Commission 30,000 Interest on Bank 3,600 Creditors 40,000 loan Purchases 3,00,000 Opening stock 1,00,000 Establishment 60,000 expenses Wages 8,000 Insurance 4,000 Debtors 1,12,400 Cash at Bank 80,000 9,30,000 9,30,000 Adjustments: a) Closing stock was Rs. 1,28,000; b) Outstanding wages Rs. 2,000 and prepaid Insurance Rs. 1,200; c) Allow interest on capital at 10% and charge interest on drawings at 5%. d) Depreciate buildings at 5%, Furniture at 15% and Motor Van at 20%.

3.

What is depreciation? Discuss any two methods of depreciating plant & Machinery with their merits and demerits. Contd…2

Code No: NR/R5-14/MBA 4.

5.

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The following particulars are available in respect of the business carried on by Mr. Wilkinson. a) Capital invested :Rs. 1,00,000 b) Trading results: 2003-Profit Rs. 24,000; 2004-profit Rs. 30,000; 2005-Loss Rs. 4,000; 2006-profit Rs. 42,000. c) Market rate of interest on investments 8% d) Rate of risk return on capital invested in business 2% e) Remuneration from alternative employment of the proprietor. Rs.7,200 p.a. A company invited the public to subscribe for Rs. 10,000 Equity shares of Rs.100 each at a premium of Rs.10 per share payable on allotment. Payments were to be made as follows: On application Rs. 20; on allotment Rs. 40; on first call Rs.30; and on final call Rs.20. Applications were received for 13,000 shares; shares for 2,000 applications were rejected and allotment was made proportionately to the remaining applicants. Both the calls were made and all the money was received except the final call on 300 shares which are forfeited after due notice. Later 200 of the forefeited shares were issued as fully paid at Rs.85 per share. Pass journal entries.

6.

Distinguish between internal and external reconstruction and explain the accounting procedure with regard to external reconstruction.

7.

Prepare Cash Flow Statement from the following balance sheets of Vimal Ltd as on 31.3.2005 and 31.3.2006.

Liabilities Equity Capital Preference Capital Profit and loss account General Reserve Unsecured Loans Current liabilities Total Assets Land and Buildings Plant and Machinery Cash at Bank Stock Sundry Debtors Vehicles Total

31.3.2005 Rs. 4,00,000 4,00,000 1,00,000 80,000 20,000 80,000 10,80,000 31.3.2005 Rs. 2,00,000 1,80,000 1,20,000 2,40,000 60,000 2,80,000 10,80,000

31.3.2006 Rs. 6,00,000 2,00,000 1,50,000 1,20,000 1,00,0000 10,000 11,80,000 31.3.2006 Rs. 1,60,000 2,40,000 80,000 2,80,000 1,00,000 3,20,000 11,80,000 Contd…3

Code No: NR/R5-14/MBA

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Adjustments: a) Dividend declared and paid Rs. 50,000; b) Additional plant purchased Rs. 1,00,000; and c) Tax paid during the year Rs. 90,000. 8.a) b) c)

If Apple company Ltd’s current Ratio is 5.5:1, Quick Ratio is 4:1. Inventory is Rs. 30,000, what are its current liabilities? If Orange company Ltd’s inventory is Rs. 1,20,000, Total Current Liabilities are Rs. 2,40,000, Quick Ratio is 2:1, Calculate Current Ratio. If Banana Company Ltd’s Current Liabilities are Rs. 50,000, quick ratio is 1.5 :1, Inventory is Rs. 25,000. Calculate current assets. ****