Seat No.:
Subject Code: 3519201
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Subject Name: Accounting for Manager
Time: 10:30 am to 1: 30 pm
Instructions:
- Attempt all questions.
- Make suitable assumptions wherever necessary.
- Figures to the right indicate full marks.
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Q.1 Explain the following question in short. (any 3)
- What is intangible assets? Give 4 example of it.
- What is trial balance? Why it is tallied every time?
- What is net worth?
- What is cash flow statement according to accounting standard 3?
- What are the objectives of accounting?
- Explain the convention of materiality.
- What is trend analysis? Give example of it.
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Q.2 (a) From the following transactions prepare journal. (07)
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Purchased goods from Mr. Moin of 1, 00,000 Rs. Paid 50 % cash.
Sold goods to Miss Rukhsar of 2, 00,000 Rs. She paid 60 % cash.
Paid fire insurance Premium of company building Rs. 5,000 Rs.
Paid interest on loan of 1, 00,000 Rs at 18% interest per annum for 6 months.
Brokerage due to us 500 Rs.
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Charge interest on Drawing on 10,000 Rs. At 18% per annum for six months.
Salary due to clerk 1,000
(b) Explain in detail. Who are the users of accounting information? (07)
OR
(b) Differentiate between book keeping an accounting (07)
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Q.3 (a) What are the different methods of providing depreciation on fixed assets? Explain (07)
(b) Company ABC purchased a machinery on 01/01/2011 for Rs 1,20,000 and spent for instalment. On 01/07/2011 second machine was purchased in 80,000 Rs. On 01/01/2013 the machine purchased on 01/01/2011 became obsolete and was sold for 1, 00,000 Rs. On 01/07/2013 new machinery was purchased at a cost of 2,40,000 Rs . The company provide depreciation on straight line method at 10% per annum on original cost of the assets.
Show machinery account from 01/01/2011 to 31/12/2014 (07)
OR
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Enrolment No.
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA - SEMESTER 1- EXAMINATION - WINTER 2018
Date: 24/12/2018
Total Marks: 70
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Q.3 (a) What is inventory valuation? Differentiate between periodic and perpetual inventory system. (07)
(b) Following entries has been found for company XYZ ltd. (07)
Purchase Issues
01/03/11 100 units @ 10 10/3/2011 80 units
12/03/11 100 units @ 9.8 14/03/2011 100 units
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15/03/11 50 units @ 9.6 31/03/2011 90 units
20/03/11 100 units @ 9.4
There was no opening inventories, prepare stock register card using LIFO, FIFO and Weightage average method.
Q.4 (a) What is cash flow statement? Explain methods of preparing cash flow statement (07)
(b) The following Balance Sheets are given: (07)
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| Liabilities | 2011 | 2012 | Assets | 2011 | 2012 |
|---|---|---|---|---|---|
| Equity Share Capital | 3,00,000 | 4.00,000 | Goodwill | 1,15,000 | 90,000 |
| Preference Capital | 1,50,000 | 1,00,000 | Building | 2,00,000 | 1,70,000 |
| General Reserve | 40,000 | 70,000 | Plant | 80,000 | 2,00,000 |
| Profit and Loss A/c | 30,000 | 48,000 | Debtors | 1,60,000 | 2,00,000 |
| Proposed Dividend | 42,000 | 50,000 | Stock | 77,000 | 1,09,000 |
| Creditors | 55,000 | 83,000 | B/R | 20,000 | 30,000 |
| Bills Payable | 20,000 | 16,000 | Cash in Hand | 15,000 | 10,000 |
| Provision for Taxation | 40,000 | 50,000 | Cash at Bank | 10,000 | 8,000 |
| 6,77,000 | 8,17,000 | 6,77,000 | 8,17,000 |
You are required to prepare; Common Size Balance Sheet.
OR
Q.4 (a) Explain errors which can be identified by trial balance. (07)
(b) Following are the closing balance of XYZ ltd on 31/03/2017 (07)
| Bank balance | 1,50,000 | General reserves | 7,00,000 |
| Investment in Infosys | 5,00,000 | Machinery | 12,00.000 |
| Debenture | 8.00,000 | Investment in TATA power | 6,00,000 |
| Debtors | 2,00,000 | Bank overdraft | 3,50,000 |
| Loan of yes bank | 3,50,000 | Investment in Reliance share | 5,35,000 |
| Loan of SBI | 4,00,000 | Patent | 2,50,000 |
| Unsecured loan | 1,00,000 | Closing stock | 2,50,000 |
| Creditors | 85,000 | Interest received in advance | 25.000 |
| Closing stock | 2,50,000 | Calls in arrears | 1,00,000 |
| Furniture | 10,00,000 | P & L a/c (profit) | 3,00,000 |
| Outstanding rent | 75,000 | Trade mark | 7,50,000 |
| Vehicles | 8,00,000 | Equity share capital | 25,00,000 |
Additional information:
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(1) Authorized share capital 5, 00,000 share of 10 Rs each. From which 50 % are issued and subscribed
(2) Investment made in share are as following: TATA POWER on 1/1/2015, RELIANCE on 01/01/2017 and INFOSYS on 01/04/201
Prepare vertical balance sheet
Q.5 CASE STUDY:
The information below is taken from the records of two companies in the same industry. The companies are X Ltd and Y Ltd; and the data is as follows:
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| Particulars | X Ltd | Y Ltd |
|---|---|---|
| Cash | 2,10,000 | 3,20,000 |
| Debtors (net) | 3.30,000 | 6,30,000 |
| Stock | 12,30,000 | 9,50,000 |
| Plant and Equipment | 16,95,000 | 24,00,000 |
| Total Assets | 34,65,000 | 43,00,000 |
| Sundry Creditors | 9,00,000 | 10,50,000 |
| 8% Debentures | 5,00,000 | 10,00,000 |
| Equity Share Capital | 11,00,000 | 17.50,000 |
| Retained Earnings | 9,65,000 | 5,00,000 |
| Total Liabilities | 34,65,000 | 43,00,000 |
| Sales | 56,00,000 | 82.00,000 |
| Cost of goods sold | 40,00,000 | 64,80,000 |
| Other Operating Expenses | 8,00,000 | 8.60,000 |
| Interest Expenses | 40,000 | 80.000 |
| Income taxes | 2,66,000 | 2,73,000 |
| Dividends | 1,00,000 | 1,80,000 |
| Price Earnings Ratio | 25 | 35 |
| Earnings Per Share | 10 | 7.5 |
Answer each of the following question by making a comparison of one, or more, relevant Ratios.
(a) Which company is using the equity shareholders’ money more profitably? Which company is better able to meet its current debts? (07)
(b) If you were to purchase the debentures of one company, which company’s debentures would you buy? (07)
Which company collects its receivables faster, assuming all sales to be credit sales? Which company is extended credit for a longer period by creditors ?, assuming all purchases (equivalent to cost of goods sold) to be credit purchases
OR
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Q.5 (a) How long does it take each company to convert an investment in stock to cash? (07)
Which company retains the larger proportion of income in the business?
(b) On the basis of price earnings ratio and earning per ratio. Which company’s stock can be purchased? (07)
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