GUJARAT TECHNOLOGICAL UNIVERSITY
MBA – SEMESTER 01– • EXAMINATION –
SUMMER 2016
Subject Code: 2810001 Date:
11/05/2016
Subject Name: Accounting For Managers (AFM)
Time: 10:30 am – 01:30 pm Total
Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever
necessary.
3. Figures to the right indicate full
marks.
Q.1 (a)
From the four alternative answers given against each of the
following cases, indicate the correct answer:(just state A, B, C or D) [06]
1. A company had Current Assets of Rs. 4,
00,000 and Current Liabilities of Rs. 1, 00,000. Afterwards it purchased goods
for Rs. 50,000 on credit. Calculate the Current Ratio after the purchase.
A.
1:3 B.
3:1
C.
4:1 D.
1:4
2.
Goods drawn by the proprietor from the
business for personal use……………..
A.
Increases capital and decreases assets.
B. Increases
assets and decreases expenses.
C.
Decreases capital and decreases assets.
D. Increases
capital and increases assets.
3.
Outstanding expenses are related
to………….
A.
Nominal account. B. Personal account.
C.
Representative personal account. D. Artificial
personal account.
4.
Profit or loss on depreciation fund
investment is transferred to:
A.
Depreciation Fund A/c. B. Asset A/c.
C.
Profit or Loss A/c. D. Bank A/c.
5.
In case of Annuity Method, the amount
of depreciation is:
A.
Increasing every year. B. Fixed for all the year.
C.
Decreasing every year. D. None of these.
6.
Compound journal entry contains…………….
A.
More than one debit entry only. B. More than one credit entry only.
C.
More than one debit entry or more than
one credit entry or both.
D.
None of these.
Q.1 (b) Define the following terms: [04]
(i) Accounting Standards.
(ii)
IFRS.
(iii)
Provisions.
(iv)
GAAP.
Q.1 (c) What do you mean by ‘Fund Flow Statement’?
Discuss the importance of Fund Flow Statement. [04]
Q.2 (a) Who are the users of accounting information,
and why do the users need accounting information? How this information helpful
to the users?
(b)
On the basis of following informations, calculate the following
ratios:
(i)
Net Profit Ratio
(ii)
Debt Equity Ratio
(iii)
Quick Ratio
Particulars
|
Amount
(in Rs.)
|
|
Paid up Capital
|
20,00,000
|
|
Capital Reserve
|
2,00,000
|
|
9 % Debentures
|
8,00,000
|
|
Net Sales
|
14,00,000
|
|
Gross Profit
|
8,00,000
|
|
Indirect Expenses
|
2,00,000
|
|
Current Assets
|
4,00,000
|
|
Current Liabilities
|
3,00,000
|
|
Opening Stock
|
50,000
|
|
Closing stock is 20%
more than Opening Stock
|
||
OR
(b)
What is Balance Sheet? Show the format of Balance Sheet in vertical
form under revised schedule VI of Companies Act, 1956 with imaginary figures. [07]
Q.3 (a) What do you mean by the term ‘depreciation’?
What are its causes? Why do firms provide depreciation? [07]
(b)
Rohan purchases a plant on 01.04.2007 for a sum of Rs. 2, 00,000
having a useful life of five years. It is estimated that the plant will have a
scrap value of Rs. 32,000 at the end of its useful life. Rohan decides to
charge depreciation according to depreciation fund method. The depreciation
fund investments are expected to earn interest @ 5 % p.a. Sinking fund table
shows that Re. 0.180975 if invested yearly at 5 % p.a. produces Re. 1 at the
end of five years. The investments are sold at the end of fifth year for a sum
of Rs. 1, 30,000 and the scrap realized Rs. 34,000.
You
are required to prepare the necessary accounts in the books of Rohan. [07]
OR
Q.3 (a) What do you understand by Trend Analysis?
Explain in brief with hypothetical example. [07]
(b)
From the following Balance Sheet of Shivam Ltd. on 31st December
2012 and 2013, you are required to prepare: [07]
(1)
Statement of Changes in Working Capital;
and
(2)
Funds Flow Statement.
Liabilities
|
31.12.13
|
31.12.12
|
Assets
|
31.12.13
|
31.12.12
|
|
Share Capital
|
4,50,000
|
4,50,000
|
Plant and Machinery
|
3,20,000
|
4,00,000
|
|
General Reserve
|
3,10,000
|
3,00,000
|
Investments
|
60,000
|
50,000
|
|
P & L A/c
|
35,000
|
30,000
|
Closing Stock
|
1,95,000
|
2,00,000
|
|
Capital Reserve
|
33,000
|
26,000
|
Bills Receivable
|
15,000
|
40,000
|
|
Debentures
|
2,70,000
|
-
|
Sundry Debtors
|
4,55,000
|
2,00,000
|
|
Creditors
|
75,000
|
90,000
|
Cash at Bank
|
1,97,000
|
1,59,000
|
|
Bills Payable
|
59,000
|
78,000
|
||||
Provision for Taxation
|
10,000
|
75,000
|
||||
12,42,000
|
10,49,000
|
12,42,000
|
10,49,000
|
Other
details are as follows:
(1)
During the year investments worth Rs.
8,000 were sold at a price of Rs. 8,500 and new investments worth Rs. 18,000
were purchased.
(2)
Net profit of the year was Rs. 62,000
after providing for depreciation of Rs. 70,000 on Plant and Machinery and Rs. 10,000
provision for taxation.
(3)
During the year Plant and Machinery
worth Rs. 10,000 were sold at a price of Rs. 12,000 and the profit on the same
was credited to Profit and Loss Account.
(4)
During the year Rs. 40,000 were paid as
Dividend.
Q.4 (a) What are the various accounting concepts?
Explain any four of them. [07]
(b)
From the following Income Statement of Malhotra Trading Company for
the year ending 31st March, 2012 and 2013, you are required to prepare a
Comparative Income Statement and give your comments:
Income Statement
For
the year ended 2012 and 2013
Particulars
|
31.03.2012
Rs.
|
31.03.2013
Rs.
|
|
Revenue From Operations
|
6,00,000
|
7,20,000
|
|
Add: Dividend Received
|
30.000
|
90,000
|
|
Total Revenue
|
6,30,000
|
8,10,000
|
|
Less: Cost of Goods Sold
|
4,20,000
|
5,60,000
|
|
Administration Expenses
|
50,000
|
66,000
|
|
Selling and Dist. Expenses
|
25,000
|
23,000
|
|
Interest on Debentures
|
12,000
|
12,000
|
|
Loss on Sale of Plant
|
6,000
|
4,000
|
|
Provision for Taxation
|
40,000
|
48,000
|
|
Net Profit
|
77,000
|
97,000
|
OR
Q.4 (a) Name AS- 9, AS-10 and AS-26. Explain any one
in detail. [07]
(b)
From the following information, you are required to calculate the
value of Closing Inventory and Cost of Goods Sold assuming (a) Perpetual
Inventory System and (b) Periodic Inventory System under FIFO method. [07]
Date
|
Transactions
|
Units
|
Price
Per Unit
(Rs.)
|
|
02/01/2013
|
Opening balance brought
forward
|
100
|
10
|
|
09/01/2013
|
Purchases
|
400
|
15
|
|
14/01/2013
|
Sales
|
300
|
-
|
|
25/01/2013
|
Purchases
|
500
|
20
|
|
29/01/2013
|
Sales
|
400
|
-
|
Q.5 Mr. Tushar decided to start a computer
business. For this purpose he built the first floor of his house at a cost of
Rs. 2, 00,000 and invested a further sum of Rs. 3, 50,000 in this business. [14]
He
wanted to start with 12 computers costing Rs. 40,000 each. He approached ICICI
Bank and secured a loan to the extent of 75 % of the cost of computers. It was
agreed that the loan will be repaid in four annual instalments are as follows:
At
the end of First Year :
Rs. 90,000 + Rs. 36,000 for interest
At
the end of Second Year :
Rs. 90,000 + Rs. 27,000 for interest
At
the end of Third Year :
Rs. 90,000 + Rs. 18,000 for interest
At
the end of Fourth Year :
Rs. 90,000 + Rs. 9,000 for interest
He
started business on 1st April, 2002. On the same date he deposited Rs. 3,
30,000 in the Bank. He purchased Computers and paid 25 % of the value of
computers from his bank and Rs. 3, 60, 000 out of bank loan availed. He
deposited Rs. 10,000 for the electric connection with the Electricity Board and
also deposited Rs. 1, 50,000 with the VSNL for internet and telephone
connection.
He
spent Rs. 40,000 for getting the Computer Café furnished and also spent Rs.
6,000 in getting the pamphlets printed and distributed.
All
payments were to be made by cheques and all the receipts were to be deposited
in the bank on the same day.
At
the end of the year, the results were:
Particulars
|
Amount
(in
Rs.)
|
|
Purchases of Computer stationery like
DVDs, CDs etc.
|
92,000
|
|
Revenue from fees received from students
of Computer classes
|
2,70,000
|
|
Revenue on Account of Internet Facility
|
2,20,000
|
|
Revenue from sale of Computer Stationery
|
1,60,000
|
|
Wages paid to servant
|
12,000
|
|
Electricity Charges
|
48,000
|
|
Telephone Charges
|
73,000
|
|
Entertainment Expenses
|
7,000
|
|
General Expenses
|
5,200
|
He
withdrew Rs. 5,000 by cheque each month for his personal expenses and duly paid
the bank loan.
You
are required to pass the necessary journal entries in the books of Mr. Tushar.
OR
Q.5 From the
following figures extracted from the books of Mr. Rohit, you are required to
prepare a Trading and Profit and Loss Account for the year ended 31st March, 2014
and a Balance Sheet as on that date after making the necessary adjustments: [14]
Particulars
|
Amount
(in
Rs.)
|
|
Drawings
|
6,000
|
|
Sundry Debtors
|
38,200
|
|
Purchases
|
1,34,916
|
|
Return Inward
|
15,642
|
|
Bills Receivable
|
13,764
|
|
5 % Loan on Mortgage (01.04.2013)
|
17,000
|
|
Interest on Loan
|
400
|
|
Cash in Hand
|
6,100
|
|
Stock (01.04.2013)
|
11,678
|
|
Capital
|
60,000
|
|
Sundry Creditors
|
16,802
|
|
Sales
|
2,22,486
|
|
Bills Payable
|
5,428
|
|
Motor Vehicle
|
18,000
|
|
Cash at Bank
|
9,110
|
|
Land and Buildings
|
24,000
|
|
Bad Debts (Debit)
|
1,250
|
|
Carriage Outward
|
2,808
|
|
Provision for Bad Debts (Credit)
|
1,420
|
|
Return Outward
|
2,692
|
|
Discount Received
|
880
|
|
Carriage Inward
|
7,858
|
|
Establishment Expenses
|
16,194
|
|
Rent, Taxes and Insurance
|
7,782
|
|
Advertisement
|
4,528
|
|
General Expenses
|
8,978
|
|
Rent Received
|
500
|
Adjustments:
(ix)
Depreciate
land and building @ 5 % p.a. and motor vehicle @ 15 % p.a.
(ii)
Salaries Rs. 1,400 and rates Rs. 800 are
due.
(iii)
Provide provision for doubtful debts is
to be maintained @ 5 % on Sundry Debtors.
(iv)
Stock in hand on 31st March,
2014 is valued at Rs. 12,500.
(v)
Goods costing Rs. 1,000 were taken by
the proprietor for his personal use; no entry has been made in the books of
accounts.
(vi)
Prepaid insurance Rs. 350.
(vii)
Provide for manager’s commission @ 5 % on net profit after charging such
commission.
(viii)
A fire broke out on 01st April, 2014 destroying goods worth Rs.
4,700.
(ix)
Goods costing Rs. 1,200 were sent to a
customer on sale or return for Rs. 1,400 on 27th March, 2014, and
have been recorded in the books as actual sales.
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