Writing anything except Roll Number on question paper will be deemed as an act
of indulging in unfair means and action shall be taken as per rules.
Roll No._________________
MBA Semester I
MBA 115 – FUNDAMENTALS OF ACCOUNTING
MODEL PAPER
Time: 3 Hrs
MM: 80
Note:
1. All Questions are compulsory in Section A. Section A carries 20 marks.
2. Attempt FIVE questions in all from Section B, selecting ONE question either A of
B from each question. Answer of each question shall be limited upto 250 words.
Each question carries 6 marks.
3. Attempt 3 questions in all from section C. Answer of each question shall be
limited upto 500 words. Each question carries 10 marks.
SECTION A
Presented below are the balance sheets of R ltd, as at December 31, 2008 and
1.
2009
BALANCE SHEET
ASSETS
2008 (Rs.)
2009 (Rs.)
Cash and bank balances
6, 00, 000
4, 00, 000
Trade debtors
6, 50, 000
8, 00, 000
Inventory
15, 50, 000
14, 00, 000
Prepaid expenses
80, 000
65, 000
Land
18, 00, 000
15, 00, 000
Equipment
16, 00, 000
20, 00, 000
Accumulated depreciation(2, 50, 000)
(3, 00, 000)
equipment
Building
25, 00, 000
25, 00, 000
Accumulated depreciation(5, 00, 000)
(6, 00, 000)
building
80, 30, 000
77, 65, 000
LIABILITIES
Provision for taxation
1, 00, 000
1, 25, 000
Trade creditors
8, 00, 000
6, 50, 000
Debentures
22, 00, 000
20, 50, 000
Equity share capital
40, 00, 000
43, 00, 000
Retained earnings
9, 30, 000
6, 40, 000
80, 30, 000
77, 65, 000
Additional information:
1. Land was sold for cash at a profit of Rs. 50,000.
2. Dividends paid during the year Rs. 4, 50, 000.
1
3.
4.
5.
6.
Net profits for the year Rs. 1, 60, 000.
Equipment costing Rs. 6, 00,000 was purchased and paid by cash. In
addition equipment costing Rs. 2, 00,000 with a book value of Rs. 40,000
was sold for Rs. 30,000 and cash was received.
Debentures were redeemed at face value by issuing shares at par.
Amount transferred to provision for taxation during the year Rs. 1,60,000.
You are required to prepare a statement of cash flow for R ltd. For the year
ended December 31, 2009.
SECTION B
2. A Define management accounting. What are the main functions of management
accounting?
OR
B Prepare the formats of trading account, profit and loss account and balance
sheet. Also mention the items.
3. A Following is the statement of an enterprise for the year ended on 31 march,
2010:
Profit and loss account
For the year ended on 31 march 2010
Profit and loss account
For the year ended on 31 march 2010
Particulars
To opening stock
To
purchases(credit)
To gross profit
Rs.
2,00,000
16,00,000
Particulars
By sales
By closing stock
18,00,000
36,00,000
Rs.
32,00,000
4,00,000
36,00,000
to office and admin
expenses
To selling expenses
4,00,000
By gross profit
18,00,000
2,00,000
By profit on sale of
fixed assets
50,000
To other expenses
To net profit
50,000
12,00,000
18,50,000
18,50,000
2
Balance sheet as on 31 march 2010
LIABILITIES
Rs.
ASSETS
2,00,000
equity 10,00,00 Land
&
shares of Rs. 5 each 0
building
General reserve
6,00,000 Plant
and
machinery
P&L a/c
4,00,000 Stock
Sundry creditors
4,00,000 Sundry debtors
Cash and bank
B
Rs.
7,00,000
5,00,000
6,00,000
4,00,000
2,00,000
24,00,00
24,00,000
0
Calculate: current ratio, liquid ratio, operating ratio, inventory turnover,
average collection period, average payment period, earnings per share. Assume
360 days in a year.
OR
What do you understand by ratio analysis? Write all the operating ratios.
4. A What are the objectives of preparing cash flow statement? Prepare the format
of cash flow statement.
OR
B The following are the summarized balance sheets of Al ltd. As on 31
December, 2004 and 2005
Liabilities
2004
2005
Assets
2004
2005
Cash at
S.creditors
39,000
41,000
2500
2700
bank
Bills payable
34,280
11,660 S.debtors
87,490
73,360
Bank
59,510
---- Stock
1,11,000
97,300
overdraft
Provision for
Land and
40,000
50,000
1,48,500 1,44,250
taxation
building
Plant and
Reserves
45,000
45,000
1,12,990 1,36,270
machinery
Profit and
44,690
46,220
loss
Share capital
2,00,000 2,60,000
4,62,480 4,53,880
4,62,480 4,53,880
The following additional information is obtained:
1. During the year ended 2005 an interim dividend of Rs. 26,000 was paid.
2. The assets of another company were purchased for Rs 60,000 payable in
fully paid shares of the company. These assets consisted of stock Rs.
21,640 and machinery Rs. 38,360. In addition, sundary purchases of plant
3
were made totaling Rs. 5,650.
3. Income tax paid during the year amounted to Rs.25,000.
4. The net profit for the year before tax was Rs62,530.
Prepare the fund flow statement for the year 2005 and changes in working
capital.
5. Define following costs with examples:
i.
Sunk cost
ii.
Prime cost
iii.
Opportunity cost
iv.
Expired cost
5. A Define following costs with examples:
i.
Sunk cost
ii.
Prime cost
iii.
Opportunity cost
iv.
Expired cos
B
OR
M ltd. Manufactures three products P,Q and R. the unit selling prices of these
products are Rs.100, Rs.80 and Rs.50 respectively. The corresponding unit
variable costs are Rs.50, Rs.40, and Rs.20. the proportions (quantity wise) in
which these products are manufactured and sold are 20%, 30% and 50%
respectively. The total fixed costs are Rs. 14, 80,000.
Given the above information, you are required to find out the overall break
even quantity and the product wise break up of such quantity.
6. A What do you understand by the term “budgetary control”. Enumerate the steps
involved in budgetary control system.
OR
B The following is an extract from the flexible budget of a service department in
a manufacturing company:
Flexible Budget
Units
Depreciation of
equipment
Power
Supervision
Wages
800
Rs.
600
250
350
60
1000
Rs.
600
275
375
60
1200
Rs.
600
300
400
60
4
Rent
Consumable stores
Repairs
Heat and light
Indirect salary
7.
8.
9.
250
150
200
80
400
2340
275
200
225
80
425
2515
325
250
275
120
475
2805
The
budg
eted activity was 1000 units of service. The actual activity and expenditure
during the period were: units 900
Costs (Rs.): Depreciation of equipment 600; Power 302.5; supervision
382.5; wages 60; rent 262.5; consumable stores 180; repairs 220.5; heat
and light 70; indirect salary 420.
You are required to prepare a report for the variances from budget for each
item of expenditure showing which are controllable by the departmental head.
SECTION C
State the nature of Management accounting and describe its importance.
from the given information, make out a balance sheet of M ltd.with as many as
details as possible:
sales 18,00,000;
total assets turnover 3
fixed assets turnover 5
current assets turnover 7.5
inventory turnover 20
debtors turnover 15
total assets to net worth 2.5
debt equity 1
current ratio 1
the summarized balance sheets of S ltd. As on 31-3-2010 and 2011 are given
below:
Liabilitie
2010
2011
Assets
2010
2011
s
Share
Fixed
4,50,000 4,50,000
4,00,000
3,20,000
capital
assets
General
Invest
3,00,000 3,10,000
50,000
60,000
reserve
ments
P&L a/c
56,000
68,000
Stock
2,40,000
2,10,000
Debtor
Creditors 1,19,000 92,000
2,10,000
4,55,000
s
Provision
for
75,000
10,000
Bank
1,00,000
1,55,000
taxation
Mortgag
-------2,70,000
e loan
5
10,00,00
12,00,00
12,00,000
10,00,000
0
0
Additional information:
1. Investments costing Rs. 8000 were sold during the year for Rs.8500.
2. Provision for tax made during the year was Rs.15, 000.
3. During the year, part of the fixed assets costing Rs 10,000 was sold
for Rs.12, 000.
4. Dividend paid during the year amounted to Rs. 45,000.
You are required to prepare a statement and sources and uses of cash.
10.
Following particulars relate to a manufacturing factory for the month of
march,2012:
Variable cost per unit
Rs.14
Fixed factory overhead
Rs.5,40,000
Fixed selling overhead
Rs. 2,52,000
Sales price per unit
Rs.20
i.
What is the break even point in amount and units?
ii.
How many units must be sold to earn a target net income of Rs.
60,000?
iii.
How many units must be sold to earn a net income of 25% of cost?
iv.
What should be the selling price per unit if the break even point is to
be brought down to 1,20,000 units?
11.
What is budgetary control? Discuss the various principles of budgetary control.
6