Institute of Rural Management Anand
Course Name: Financial Accounting
Date: 24/10/2021
Programme: PGDM-RM42 and FPM-RM20
Term – I
Roll No.______________________
End Term Examination (Open Book)
Duration of Exam: 2:00 Hrs
Weightage: 25 percent
Total Marks: 50
Q-1. From the following statements of Panna Company Ltd., for the year ending 31st March
2015, you are required to write down the formula and calculate the following ratios:
(12 marks)
1.
2.
3.
4.
Interest Coverage ratio
Quick Ratio
Return on Capital Employed Ratio
Net Profit Ratio
Net profit after tax Rs.34,000/- and sales of Rs.6,80,000 as per P&L A/c.
Balance Sheet as on 31-3-2021
Liabilities
Rs.
Share Capital:
Assets
Rs.
Fixed Assets:
Equity shares of Rs.100 each
1,50,000
Less: Depreciation
8% Pref. shares of Rs.100 each
50,000
Current Assets:
Reserves
1,50,000
Stock
60,000
6% Debentures
1,00,000
Debtors
35,000
Cash
5,000
Current Liabilities (Excluding Bank 1,20,000
4,90,000
O/d)
Band O/d
20,000
5,90,000
5,90,000
Q.2 Prepare Cash Flow statement.
(20 Marks)
Liabilities
31.03.2020 31.03.2021
Equity share Capital
1,00,000
1,50,000
Reserves
and
50,000
1,00,000
Surplus
8% Debentures
1,00,000
1,50,000
Bank over draft
10,000
15,000
Creditors
30,000
15,000
Provision for tax
10,000
3,00,000
Assets
Fixed Assets
15% Investments
Cash
Bank
Marketable
Securities
30,000
4,60,000
31.03.2020 31.03.2021
2,00,000
3,95,000
60,000
10,000
5,000
15,000
20,000
15,000
20,000
20,000
3,00,000
4,60,000
•Additional Information:
A.Issue of Debentures and sale of investment were on 01.02.2021
B.Depreciation on Fixed assets was Rs.20,000.
C. Half of the opening fixed assets are sold @ 15% profit
D.Tax paid Rs. 9000
Q-3 (A). Ding Dong Limited acquired a piece of land for setting up a factory for Rs.50 Million
on 1 st January 2018. It took a loan of Rs. 30 Million from Punjab National Bank at 10% for this
purpose, the balance being met from internal resources. It also incurred 1% of the land cost
towardscommission to the real estate agent and 5% towards the registration fees. The earlier
owner has defaulted on payment of property tax, and the same was also paid by the company
amounting to Rs.50,000. It incurred Rs. 1 million towards clearing and fencing of the land. The
company repaid the loan to the State Bank of India on 31 st March 2019. You are required to
determine the cost at which the land will be capitalized in the books of Ding Dong Limited.
(6 marks)
Q-3(B). Samrasar Limited incurred the following expenditures during the year 2020-21.
Please state whether each of them should be treated as Operating Expenses for the year or
capitalized as an asset.
(5 marks)
1. Incurred Rs.50,000 towards the repair of a machine that had a major breakdown.
2. Incurred Rs. 6,75,000 for overhauling a second-hand machine recently purchased.
3. A FMCG company sponsored a cricket series incurring Rs.50 million towards the
sponsorship fees. It is expected that it will enhance the brand value of the company.
4. Paid Rs.1,00,000 towards insurance of a new machine while it was being transported
to the factory premises for installation.
5. Incurred Rs.7,00,000 for replacing a major part that has become faulty. It is expected
that the new part will also result in increasing the capacity of the machine by 20%.
Q-3 (C) From the following financial details kindly explain that company is in which stage of
cash flow life cycle. Justify your answer.
(3 Marks)
Particulars
Cash Flow from Operating
Activity
Cash Flow from Investing
Activity
Cash Flow from Financing
Activity
A+B+C
Opening Cash
Closing Cash
(Rs. In million)
2020
2021
2017
2018
2019
78404
79701
73707
64709
102101
-25957
-138764
-78908
50023
-3706
-8297
44150
114201
158351
-1376
-60439
158351
97912
-43676
-48877
97912
49035
-129184
-14452
49035
34583
-13951
84444
34583
119027
Q-4. Explain Trend Analysis and Common-size Statement.
(4 Marks)