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Enrolment No.GUJARAT TECHNOLOGICAL UNIVERSITY
MBA - SEMESTER 1- EXAMINATION - SUMMER 2019
Subject Code:2810001
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Subject Name: Accounting for ManagersDate:14/05/2019
Time:02:30 PM to 05:30 PM
Total Marks: 70
Instructions:
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1. Attempt all questions.2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q1. (a) Identify the letter of the choice that best completes the statement or answers the question 6
- A person who supplies goods to the firm is known as
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A A Debtor B A Creditor
C Proprietor D None of these - Investment is taken as
A Current Assets B Fixed Assets
C None of these D Both A and B - The animals used in the business is known as
A Current Assets B Dead-stock
C Livestock D Fictitious Assets - Insolvent means
A Assets=Liabilities B Assets>Liabilities--- Content provided by FirstRanker.com ---
C Assets and Liabilities=0 D Assets- The amount which is irrecoverable from debtor is known as
A Doubtful Debt B Bad Debts
C Good Debt D None of these- An entrepreneur withdrawing goods or money for personal use is known as
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C Withdrawals D Drawings - The amount which is irrecoverable from debtor is known as
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Q1. (b) Explain the following terms: 4
- Dead-stock
- Intangible Asset
- Authorized Share Capital
- Preliminary Expenses
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Q1. (c) 100 shares of Rs.500-each are purchased by Mr.X after paying brokerage of 2% and 4
Investment Advisor’s Fees of Rs.500. Find out the cost of investment.
Q2. (a) Write a short-note on Trend Analysis. Support it with imaginary figures. 7
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Q2. (b) From the following data, identify the value of the closing stock and Cost of Goods 7
Sold under LIFO, FIFO and WAM as per periodic inventory system. Comment on
the value of the closing stock.
July 1 Inventory 100 units at Rs.8
July 8 Sale 90 units
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July 15 Purchase 125 units at Rs.1225 Sale 60 units
OR
Q2. (b) Write a short-note on AS-9 Recognition of Income. 7
Q3. (a) How is Accounting useful to different type of users? Elaborate the statement. 7
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Q3. (b) Journalize the following the transactions: 7
- Started business with cash Rs.1,00,000.
- Sold goods of Rs.25,000 to Ms.Rekha at 35% profit on Sales price.
- Paid salary Rs.30,000 to Ms.Dipika.
- Paid Rs.30,000 in full settlement to Ms. Tina towards her dues of Rs.30,105.
- Rent of Rs.3,000 is due but not received.
- Paid Rs.1,001 in the wedding ceremony of maternal uncle’s son.
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OR
Q3. Write a short-note on Accounting Standard with reference to various levels of categories of enterprises.
Q4. (a) Interpret the following ratios in the best possible manner. Both the companies are in the same industry.
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| Type of Ratio | Lincoln Company | Abraham Company |
|---|---|---|
| Current Ratio | 2.6:1 | 2.2:1 |
| Quick Ratio | 2.6:1 | 2.6:1 |
| Debtors Turnover | 12.7 times | 9.2 times |
| Average Collection Period | 29 days | 40 days |
| Inventory Turnover | 3.8 times | 2.8 times |
| Interest Coverage Ratio | 28.1 times | 12.2 times |
| Rate earned on total assets | 8.2% | 7.3% |
Q4. (b) What is Generally Accepted Accounting Principles? Explain any four principles of your choice with appropriate example.
Q4. (a) On 1st January, 2010 M/s. Joseph Limited purchased machinery for Rs.12,000 and on 30th June, 2011, it acquired additional machinery at a cost of Rs.2,000. On 31st March, 2012 one of the original machines which cost Rs.2,000 was found to have become obsolete and was sold as scrap for Rs.500, it was replaced on the same day by a new machine costing Rs.800. Depreciation is to be provided at the rate of 15% per annum on the Written Down Value Method. Show machinery account for three years. The year end to be followed is 31 December.
OR
Q4. (b) Differentiate between Provision and Reserves.
Q5. (a) Write a short-note on DuPont'Model.
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Q5. (b) From the following trial balance of Ram Gopal and Sons as on 31st March, 2012, prepare trading and profit and loss account for the year ending 31st March, 2012 and balance sheet as on that date:
| Particulars | Debit (Rs.) | Credit (Rs.) |
|---|---|---|
| Capital | - | 3,50,000 |
| Drawings | 25,000 | - |
| Plant and Machinery | 1,50,000 | - |
| Debtors and Creditors | 90,000 | 40,000 |
| Returns | 10,000 | 12,000 |
| Discount | 5,000 | 4,000 |
| Commission | 8,000 | - |
| Interest on bank loan | 22,000 | - |
| Furniture | 34,000 | - |
| Provision for Doubtful debts | - | 12,000 |
| Wages | 48,000 | - |
| Salaries | 60,000 | - |
| Advertisements | 15,000 | - |
| Taxes and Insurance | 12,000 | - |
| Purchases | 2,40,000 | - |
| Stock (as on 31.03.2011) | 50,000 | - |
| Carriage | 12,000 | - |
| Land and Buildings | 3,00,000 | - |
| Cash in Hand | 12,000 | - |
| Cash at Bank | 25,000 | - |
| 10% Bank Loan (as on 01.4.2011) | - | 2,20,000 |
| Total | 11,18,000 | 11,18,000 |
Adjustments:
- Stock was valued at Rs.46,000 as on 31st March, 2012.
- Wages and salaries were outstanding Rs.5,000 and Rs.4,000 respectively on 31st March, 2012.
- Depreciate Plant and Machinery, land and buildings and furniture at 15%, 2.5% and 15% respectively.
- Provide for doubtful debts at 10% on debtors.
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Q5. (b) Draw the Performa of Vertical Balance-Sheet with imaginary numbers.
OR
Q5. (a) The accompanying balance-sheet relates to Hypothetical Ltd. Convert these into Common-Size Statements and interpret the same. (Amount is in lakh of rupees).
| Liabilities | 2015 | 2016 | Assets | 2015 | 2016 |
|---|---|---|---|---|---|
| Equity Share Capital (Rs.10 each) | 240.0 | 240.0 | Plant (net) | 402 | 390 |
| General Reserves | 96.0 | 182.0 | Cash | 54 | 78 |
| Long Term Loans | 182.0 | 169.5 | Debtors | 60 | 65 |
| Creditors | 67.0 | 52.0 | Inventories | 84 | 117 |
| Outstanding Expenses | 6.0 | - | |||
| Other Current Liabilities | 9.0 | 6.5 | |||
| Total | 600 | 650 | Total | 600 | 650 |
Q5. (b) Write a short-note on Fund Flow' Analysis. 7
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