Download GTU (Gujarat Technological University) MBA (Master of Business Administration) 2016 Winter 1st Sem 2810001 Accounting For Managers Previous Question Paper
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 1? ? EXAMINATION ? WINTER 2016
Subject Code: 2810001 Date: 30/12/2016
Subject Name: Accounting for Managers
Time: 10:30 AM to 1:30 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) Identify the letter of the choice that best completes the statement or answers the
question.
6
1. Money spent Rs.10,000 as travelling expenses of the directors on trips abroad for
purchase of capital asset is-
A. Capital Expenditure B. Revenue Expenditure
C. Deferred Revenue Expenditure D. None of the above
2. Purchase of office furniture Rs.1200 has been debited to General expense account.
It is -
A. Clerical Error B. Error of Principle
C. Error of Omission D Compensating Error
3. Wages paid for erecting a machine should be debited to -
A. Repair account B. Machine account
C. Wages account D. None of the above
4. The concept of conservatism when applied to the balance sheet results in ---
A. Understatement of assets B. Overstatement of capital
C. Overstatement of assets D. None of the above
5. As per the companies act, only preference shares which are redeemable within -
A. 24 years B. 22 years
C. 30 years D. 20 years
6. Sales for the year ended amounted to Rs.10,00,000. Sales included goods sold to
Mr. A for Rs.50,000 - ?at a profit of 20% on cost. Such goods are still lying in the
go down at the buyer?s risk.? Such goods should be treated as part of-
A. Sales B. Closing stock
C. Goods in transit D. Sales return
Q.1
(b)
Explain the following terms:
1. Business entity concept
2. Money measurement concept
3. Authorized share capital
4. Return on net worth (RONW)
04
Q.1 (c) Larsen & Toubro sought the advice of an investment advisor for deployment of
surplus funds of around Rs.45 lakh in the stock market. The advisor advised to
invest in Glenmark Pharma Ltd. and charged Rs.7,500 as his fee. Accordingly,
LT bought 8,500 equity shares of the face value of Rs.10 each of Glenmark
Pharma at Rs.520 per share from NSE through a stockbroker, Sharekhan
Limited. The broker charged a brokerage of 0.50%. Determine the cost of this
investment.
04
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Page 1 of 5
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 1? ? EXAMINATION ? WINTER 2016
Subject Code: 2810001 Date: 30/12/2016
Subject Name: Accounting for Managers
Time: 10:30 AM to 1:30 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) Identify the letter of the choice that best completes the statement or answers the
question.
6
1. Money spent Rs.10,000 as travelling expenses of the directors on trips abroad for
purchase of capital asset is-
A. Capital Expenditure B. Revenue Expenditure
C. Deferred Revenue Expenditure D. None of the above
2. Purchase of office furniture Rs.1200 has been debited to General expense account.
It is -
A. Clerical Error B. Error of Principle
C. Error of Omission D Compensating Error
3. Wages paid for erecting a machine should be debited to -
A. Repair account B. Machine account
C. Wages account D. None of the above
4. The concept of conservatism when applied to the balance sheet results in ---
A. Understatement of assets B. Overstatement of capital
C. Overstatement of assets D. None of the above
5. As per the companies act, only preference shares which are redeemable within -
A. 24 years B. 22 years
C. 30 years D. 20 years
6. Sales for the year ended amounted to Rs.10,00,000. Sales included goods sold to
Mr. A for Rs.50,000 - ?at a profit of 20% on cost. Such goods are still lying in the
go down at the buyer?s risk.? Such goods should be treated as part of-
A. Sales B. Closing stock
C. Goods in transit D. Sales return
Q.1
(b)
Explain the following terms:
1. Business entity concept
2. Money measurement concept
3. Authorized share capital
4. Return on net worth (RONW)
04
Q.1 (c) Larsen & Toubro sought the advice of an investment advisor for deployment of
surplus funds of around Rs.45 lakh in the stock market. The advisor advised to
invest in Glenmark Pharma Ltd. and charged Rs.7,500 as his fee. Accordingly,
LT bought 8,500 equity shares of the face value of Rs.10 each of Glenmark
Pharma at Rs.520 per share from NSE through a stockbroker, Sharekhan
Limited. The broker charged a brokerage of 0.50%. Determine the cost of this
investment.
04
Page 2 of 5
Q.2 (a) Explain the important tools of financial statement analysis. 07
(b) From the following data, calculate the value of closing inventory according to
FIFO and LIFO on March, 31, 2014 using:
(1) Periodic inventory system and
(2) Perpetual inventory system
On March 1, stock in hand 400 units @ Rs.7.50 each.
Purchase
s
Units Rs. Issues Units
5-Mar 600 8 3-Mar 300
15-Mar 500 9 10-Mar 500
25-Mar 400 8.5 17-Mar 400
30-Mar 300 9.5 26-Mar 500
31-Mar 200
07
OR
(b) Discuss income recognition and accrual income under AS-9. 07
Q.3 (a) Define Accounting. Explain the different branches of accounting.
07
(b) Calculate the following ratios:
(i) Gross profit ratio (ii) Net profit ratio (iii) Return on capital employed (iv)
Return on Equity
Particulars Rs.
Sales 5,20,000
Sales Tax 10,000
Return Inwards 10,000
Opening stock 10,000
Purchase 1,10,000
Closing stock 25,000
Wages 5,000
Debentures 1,00,000
Preliminary expenses 1,00,000
Preference share dividend 50,000
Interest expense 50,000
Tax expense 50,000
Operating expenses 2,00,000
Equity share capital 3,00,000
Preference share capital 2,00,000
07
OR
Q.3 (a) Explain the detail applicability of Accounting Standards with special reference to
various levels of categories of enterprises.
07
(b) The financial statements of Grace Corporation are as follows:
07
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Page 1 of 5
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 1? ? EXAMINATION ? WINTER 2016
Subject Code: 2810001 Date: 30/12/2016
Subject Name: Accounting for Managers
Time: 10:30 AM to 1:30 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) Identify the letter of the choice that best completes the statement or answers the
question.
6
1. Money spent Rs.10,000 as travelling expenses of the directors on trips abroad for
purchase of capital asset is-
A. Capital Expenditure B. Revenue Expenditure
C. Deferred Revenue Expenditure D. None of the above
2. Purchase of office furniture Rs.1200 has been debited to General expense account.
It is -
A. Clerical Error B. Error of Principle
C. Error of Omission D Compensating Error
3. Wages paid for erecting a machine should be debited to -
A. Repair account B. Machine account
C. Wages account D. None of the above
4. The concept of conservatism when applied to the balance sheet results in ---
A. Understatement of assets B. Overstatement of capital
C. Overstatement of assets D. None of the above
5. As per the companies act, only preference shares which are redeemable within -
A. 24 years B. 22 years
C. 30 years D. 20 years
6. Sales for the year ended amounted to Rs.10,00,000. Sales included goods sold to
Mr. A for Rs.50,000 - ?at a profit of 20% on cost. Such goods are still lying in the
go down at the buyer?s risk.? Such goods should be treated as part of-
A. Sales B. Closing stock
C. Goods in transit D. Sales return
Q.1
(b)
Explain the following terms:
1. Business entity concept
2. Money measurement concept
3. Authorized share capital
4. Return on net worth (RONW)
04
Q.1 (c) Larsen & Toubro sought the advice of an investment advisor for deployment of
surplus funds of around Rs.45 lakh in the stock market. The advisor advised to
invest in Glenmark Pharma Ltd. and charged Rs.7,500 as his fee. Accordingly,
LT bought 8,500 equity shares of the face value of Rs.10 each of Glenmark
Pharma at Rs.520 per share from NSE through a stockbroker, Sharekhan
Limited. The broker charged a brokerage of 0.50%. Determine the cost of this
investment.
04
Page 2 of 5
Q.2 (a) Explain the important tools of financial statement analysis. 07
(b) From the following data, calculate the value of closing inventory according to
FIFO and LIFO on March, 31, 2014 using:
(1) Periodic inventory system and
(2) Perpetual inventory system
On March 1, stock in hand 400 units @ Rs.7.50 each.
Purchase
s
Units Rs. Issues Units
5-Mar 600 8 3-Mar 300
15-Mar 500 9 10-Mar 500
25-Mar 400 8.5 17-Mar 400
30-Mar 300 9.5 26-Mar 500
31-Mar 200
07
OR
(b) Discuss income recognition and accrual income under AS-9. 07
Q.3 (a) Define Accounting. Explain the different branches of accounting.
07
(b) Calculate the following ratios:
(i) Gross profit ratio (ii) Net profit ratio (iii) Return on capital employed (iv)
Return on Equity
Particulars Rs.
Sales 5,20,000
Sales Tax 10,000
Return Inwards 10,000
Opening stock 10,000
Purchase 1,10,000
Closing stock 25,000
Wages 5,000
Debentures 1,00,000
Preliminary expenses 1,00,000
Preference share dividend 50,000
Interest expense 50,000
Tax expense 50,000
Operating expenses 2,00,000
Equity share capital 3,00,000
Preference share capital 2,00,000
07
OR
Q.3 (a) Explain the detail applicability of Accounting Standards with special reference to
various levels of categories of enterprises.
07
(b) The financial statements of Grace Corporation are as follows:
07
Page 3 of 5
GRACE CORPORATION : BALANCE SHEET, MARCH 31
PARTICULARS 2014 2013
SHAREHOLDER?S FUNDS
Share Capital 25,000 25,000
Reserve & Surplus 11,800 8,600
36,800 33,600
LIABILITIES
Secured Loans 9,000 8,000
Unsecured Loans 3,000 1,000
Current Liabilities 23,300 17,100
35,300 26,100
Total equities and liabilities 72,100 59,700
ASSETS
Fixed Assets 32,200 26,500
Investments 2,800 4,300
Inventories 10,600 4,900
Debtors 20,900 15,600
Cash 4,400 7,000
Other current assets 1,200 1,400
Total assets 72,100 59,700
Prepare common-size balance sheet and interpret the same.
Q.4 (a) Write a brief note on Global Financial Reporting Standards. State any four
differences between IFRS, Indian GAAPs and US GAAPs.
07
(b) The following information is provided for machinery.
Cost of machinery is Rs.9,00,000
Installation charges Rs.1,00,000
Rate of depreciation : 10%
i) Determine the cost of machinery.
ii) Determine the total accumulated depreciation till the end of year four as per
SLM method of depreciation and WDV method of depreciation.
iii) If the company followed SLM for the first four years and decides to switch
over to WDV, what would be the amount of resultant surplus/deficit and
treatment in income statement?
07
OR
Q.4 Following are the balance sheets of TCS Limited for the year 2013 and 2014.
Liabilities 2013 2014 Assets 2013 2014
Share Cap. 24,00,000 30,00,000 Buildings 16,00,000 15,20,000
14%
Debenture
12,00,000 8,00,000 Machinery 10,00,000 14,40,000
Profit & Loss
a/c
2,00,000 3,00,000 Short-term
Investment
6,00,000 9,00,000
General Res. 6,00,000 7,00,000 Inventories 8,00,000 9,40,000
14
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Page 1 of 5
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 1? ? EXAMINATION ? WINTER 2016
Subject Code: 2810001 Date: 30/12/2016
Subject Name: Accounting for Managers
Time: 10:30 AM to 1:30 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) Identify the letter of the choice that best completes the statement or answers the
question.
6
1. Money spent Rs.10,000 as travelling expenses of the directors on trips abroad for
purchase of capital asset is-
A. Capital Expenditure B. Revenue Expenditure
C. Deferred Revenue Expenditure D. None of the above
2. Purchase of office furniture Rs.1200 has been debited to General expense account.
It is -
A. Clerical Error B. Error of Principle
C. Error of Omission D Compensating Error
3. Wages paid for erecting a machine should be debited to -
A. Repair account B. Machine account
C. Wages account D. None of the above
4. The concept of conservatism when applied to the balance sheet results in ---
A. Understatement of assets B. Overstatement of capital
C. Overstatement of assets D. None of the above
5. As per the companies act, only preference shares which are redeemable within -
A. 24 years B. 22 years
C. 30 years D. 20 years
6. Sales for the year ended amounted to Rs.10,00,000. Sales included goods sold to
Mr. A for Rs.50,000 - ?at a profit of 20% on cost. Such goods are still lying in the
go down at the buyer?s risk.? Such goods should be treated as part of-
A. Sales B. Closing stock
C. Goods in transit D. Sales return
Q.1
(b)
Explain the following terms:
1. Business entity concept
2. Money measurement concept
3. Authorized share capital
4. Return on net worth (RONW)
04
Q.1 (c) Larsen & Toubro sought the advice of an investment advisor for deployment of
surplus funds of around Rs.45 lakh in the stock market. The advisor advised to
invest in Glenmark Pharma Ltd. and charged Rs.7,500 as his fee. Accordingly,
LT bought 8,500 equity shares of the face value of Rs.10 each of Glenmark
Pharma at Rs.520 per share from NSE through a stockbroker, Sharekhan
Limited. The broker charged a brokerage of 0.50%. Determine the cost of this
investment.
04
Page 2 of 5
Q.2 (a) Explain the important tools of financial statement analysis. 07
(b) From the following data, calculate the value of closing inventory according to
FIFO and LIFO on March, 31, 2014 using:
(1) Periodic inventory system and
(2) Perpetual inventory system
On March 1, stock in hand 400 units @ Rs.7.50 each.
Purchase
s
Units Rs. Issues Units
5-Mar 600 8 3-Mar 300
15-Mar 500 9 10-Mar 500
25-Mar 400 8.5 17-Mar 400
30-Mar 300 9.5 26-Mar 500
31-Mar 200
07
OR
(b) Discuss income recognition and accrual income under AS-9. 07
Q.3 (a) Define Accounting. Explain the different branches of accounting.
07
(b) Calculate the following ratios:
(i) Gross profit ratio (ii) Net profit ratio (iii) Return on capital employed (iv)
Return on Equity
Particulars Rs.
Sales 5,20,000
Sales Tax 10,000
Return Inwards 10,000
Opening stock 10,000
Purchase 1,10,000
Closing stock 25,000
Wages 5,000
Debentures 1,00,000
Preliminary expenses 1,00,000
Preference share dividend 50,000
Interest expense 50,000
Tax expense 50,000
Operating expenses 2,00,000
Equity share capital 3,00,000
Preference share capital 2,00,000
07
OR
Q.3 (a) Explain the detail applicability of Accounting Standards with special reference to
various levels of categories of enterprises.
07
(b) The financial statements of Grace Corporation are as follows:
07
Page 3 of 5
GRACE CORPORATION : BALANCE SHEET, MARCH 31
PARTICULARS 2014 2013
SHAREHOLDER?S FUNDS
Share Capital 25,000 25,000
Reserve & Surplus 11,800 8,600
36,800 33,600
LIABILITIES
Secured Loans 9,000 8,000
Unsecured Loans 3,000 1,000
Current Liabilities 23,300 17,100
35,300 26,100
Total equities and liabilities 72,100 59,700
ASSETS
Fixed Assets 32,200 26,500
Investments 2,800 4,300
Inventories 10,600 4,900
Debtors 20,900 15,600
Cash 4,400 7,000
Other current assets 1,200 1,400
Total assets 72,100 59,700
Prepare common-size balance sheet and interpret the same.
Q.4 (a) Write a brief note on Global Financial Reporting Standards. State any four
differences between IFRS, Indian GAAPs and US GAAPs.
07
(b) The following information is provided for machinery.
Cost of machinery is Rs.9,00,000
Installation charges Rs.1,00,000
Rate of depreciation : 10%
i) Determine the cost of machinery.
ii) Determine the total accumulated depreciation till the end of year four as per
SLM method of depreciation and WDV method of depreciation.
iii) If the company followed SLM for the first four years and decides to switch
over to WDV, what would be the amount of resultant surplus/deficit and
treatment in income statement?
07
OR
Q.4 Following are the balance sheets of TCS Limited for the year 2013 and 2014.
Liabilities 2013 2014 Assets 2013 2014
Share Cap. 24,00,000 30,00,000 Buildings 16,00,000 15,20,000
14%
Debenture
12,00,000 8,00,000 Machinery 10,00,000 14,40,000
Profit & Loss
a/c
2,00,000 3,00,000 Short-term
Investment
6,00,000 9,00,000
General Res. 6,00,000 7,00,000 Inventories 8,00,000 9,40,000
14
Page 4 of 5
Creditors 9,80,000 11,20,000 Debtors 13,40,000 10,60,000
Proposed
dividend
2,40,000 3,60,000 Cash at
Bank
4,40,000 6,60,000
Prov. for Tax 2,00,000 2,60,000 Prepaid Exp 40,000 20,000
TOTAL 58,20,000 65,40,000 TOTAL 58,20,000 65,40,000
Additional Information:
1. Debentures were redeemed at a premium of 10%
2. Taxes paid during the year amounted to Rs.2,80,000
3. A machine (book value Rs.1,60,000) was sold for Rs.2,60,000 and new
machinery worth Rs.7,20,000 was acquired during the year.
You are require to prepare statement of changes in working capital, statement
showing funds from operations and statement fund flow statement.
Q.5 Gujarat Indoor Stadium Ltd. was set up on August 1, 2013. Its trial balance on
August 31, 2013 is as follows;
GUJARAT INDOOR STADIUM LIMITED
Trial Balance, August 31, 2013
Account Debit Credit
Swimming Pool 12,000 -
Tennis Court 9,600 -
Supplies 3,280 -
Debtors 2,910 -
Cash 940 -
Prepaid Insurance 1,200 -
Creditors -
1,290
Unearned Revenue -
2,100
Share Capital - 15,000
Dividends 800 -
Revenue from Services - 15,540
Salaries 2,910 -
Telephone expenses 290 -
33,930 33,930
The following additional information is available:
(a) The swimming pool has an estimated life of five years and the tennis court
has an estimated life of eight years. Neither has any scrap value.
(b) The inventory of supplies on August 31 is Rs.1190.
(c) Subscription revenues of Rs.1200 is due from members who have been
admitted on a provisional basis.
(d) Unearned subscription includes an amount of Rs.300 for August.
(e) Staff salaries for the last week totalling Rs.1290 have not been paid.
(f) The local electricity company sent a bill for Rs.280 for August after the close
of the month?s transactions.
14
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Page 1 of 5
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER 1? ? EXAMINATION ? WINTER 2016
Subject Code: 2810001 Date: 30/12/2016
Subject Name: Accounting for Managers
Time: 10:30 AM to 1:30 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) Identify the letter of the choice that best completes the statement or answers the
question.
6
1. Money spent Rs.10,000 as travelling expenses of the directors on trips abroad for
purchase of capital asset is-
A. Capital Expenditure B. Revenue Expenditure
C. Deferred Revenue Expenditure D. None of the above
2. Purchase of office furniture Rs.1200 has been debited to General expense account.
It is -
A. Clerical Error B. Error of Principle
C. Error of Omission D Compensating Error
3. Wages paid for erecting a machine should be debited to -
A. Repair account B. Machine account
C. Wages account D. None of the above
4. The concept of conservatism when applied to the balance sheet results in ---
A. Understatement of assets B. Overstatement of capital
C. Overstatement of assets D. None of the above
5. As per the companies act, only preference shares which are redeemable within -
A. 24 years B. 22 years
C. 30 years D. 20 years
6. Sales for the year ended amounted to Rs.10,00,000. Sales included goods sold to
Mr. A for Rs.50,000 - ?at a profit of 20% on cost. Such goods are still lying in the
go down at the buyer?s risk.? Such goods should be treated as part of-
A. Sales B. Closing stock
C. Goods in transit D. Sales return
Q.1
(b)
Explain the following terms:
1. Business entity concept
2. Money measurement concept
3. Authorized share capital
4. Return on net worth (RONW)
04
Q.1 (c) Larsen & Toubro sought the advice of an investment advisor for deployment of
surplus funds of around Rs.45 lakh in the stock market. The advisor advised to
invest in Glenmark Pharma Ltd. and charged Rs.7,500 as his fee. Accordingly,
LT bought 8,500 equity shares of the face value of Rs.10 each of Glenmark
Pharma at Rs.520 per share from NSE through a stockbroker, Sharekhan
Limited. The broker charged a brokerage of 0.50%. Determine the cost of this
investment.
04
Page 2 of 5
Q.2 (a) Explain the important tools of financial statement analysis. 07
(b) From the following data, calculate the value of closing inventory according to
FIFO and LIFO on March, 31, 2014 using:
(1) Periodic inventory system and
(2) Perpetual inventory system
On March 1, stock in hand 400 units @ Rs.7.50 each.
Purchase
s
Units Rs. Issues Units
5-Mar 600 8 3-Mar 300
15-Mar 500 9 10-Mar 500
25-Mar 400 8.5 17-Mar 400
30-Mar 300 9.5 26-Mar 500
31-Mar 200
07
OR
(b) Discuss income recognition and accrual income under AS-9. 07
Q.3 (a) Define Accounting. Explain the different branches of accounting.
07
(b) Calculate the following ratios:
(i) Gross profit ratio (ii) Net profit ratio (iii) Return on capital employed (iv)
Return on Equity
Particulars Rs.
Sales 5,20,000
Sales Tax 10,000
Return Inwards 10,000
Opening stock 10,000
Purchase 1,10,000
Closing stock 25,000
Wages 5,000
Debentures 1,00,000
Preliminary expenses 1,00,000
Preference share dividend 50,000
Interest expense 50,000
Tax expense 50,000
Operating expenses 2,00,000
Equity share capital 3,00,000
Preference share capital 2,00,000
07
OR
Q.3 (a) Explain the detail applicability of Accounting Standards with special reference to
various levels of categories of enterprises.
07
(b) The financial statements of Grace Corporation are as follows:
07
Page 3 of 5
GRACE CORPORATION : BALANCE SHEET, MARCH 31
PARTICULARS 2014 2013
SHAREHOLDER?S FUNDS
Share Capital 25,000 25,000
Reserve & Surplus 11,800 8,600
36,800 33,600
LIABILITIES
Secured Loans 9,000 8,000
Unsecured Loans 3,000 1,000
Current Liabilities 23,300 17,100
35,300 26,100
Total equities and liabilities 72,100 59,700
ASSETS
Fixed Assets 32,200 26,500
Investments 2,800 4,300
Inventories 10,600 4,900
Debtors 20,900 15,600
Cash 4,400 7,000
Other current assets 1,200 1,400
Total assets 72,100 59,700
Prepare common-size balance sheet and interpret the same.
Q.4 (a) Write a brief note on Global Financial Reporting Standards. State any four
differences between IFRS, Indian GAAPs and US GAAPs.
07
(b) The following information is provided for machinery.
Cost of machinery is Rs.9,00,000
Installation charges Rs.1,00,000
Rate of depreciation : 10%
i) Determine the cost of machinery.
ii) Determine the total accumulated depreciation till the end of year four as per
SLM method of depreciation and WDV method of depreciation.
iii) If the company followed SLM for the first four years and decides to switch
over to WDV, what would be the amount of resultant surplus/deficit and
treatment in income statement?
07
OR
Q.4 Following are the balance sheets of TCS Limited for the year 2013 and 2014.
Liabilities 2013 2014 Assets 2013 2014
Share Cap. 24,00,000 30,00,000 Buildings 16,00,000 15,20,000
14%
Debenture
12,00,000 8,00,000 Machinery 10,00,000 14,40,000
Profit & Loss
a/c
2,00,000 3,00,000 Short-term
Investment
6,00,000 9,00,000
General Res. 6,00,000 7,00,000 Inventories 8,00,000 9,40,000
14
Page 4 of 5
Creditors 9,80,000 11,20,000 Debtors 13,40,000 10,60,000
Proposed
dividend
2,40,000 3,60,000 Cash at
Bank
4,40,000 6,60,000
Prov. for Tax 2,00,000 2,60,000 Prepaid Exp 40,000 20,000
TOTAL 58,20,000 65,40,000 TOTAL 58,20,000 65,40,000
Additional Information:
1. Debentures were redeemed at a premium of 10%
2. Taxes paid during the year amounted to Rs.2,80,000
3. A machine (book value Rs.1,60,000) was sold for Rs.2,60,000 and new
machinery worth Rs.7,20,000 was acquired during the year.
You are require to prepare statement of changes in working capital, statement
showing funds from operations and statement fund flow statement.
Q.5 Gujarat Indoor Stadium Ltd. was set up on August 1, 2013. Its trial balance on
August 31, 2013 is as follows;
GUJARAT INDOOR STADIUM LIMITED
Trial Balance, August 31, 2013
Account Debit Credit
Swimming Pool 12,000 -
Tennis Court 9,600 -
Supplies 3,280 -
Debtors 2,910 -
Cash 940 -
Prepaid Insurance 1,200 -
Creditors -
1,290
Unearned Revenue -
2,100
Share Capital - 15,000
Dividends 800 -
Revenue from Services - 15,540
Salaries 2,910 -
Telephone expenses 290 -
33,930 33,930
The following additional information is available:
(a) The swimming pool has an estimated life of five years and the tennis court
has an estimated life of eight years. Neither has any scrap value.
(b) The inventory of supplies on August 31 is Rs.1190.
(c) Subscription revenues of Rs.1200 is due from members who have been
admitted on a provisional basis.
(d) Unearned subscription includes an amount of Rs.300 for August.
(e) Staff salaries for the last week totalling Rs.1290 have not been paid.
(f) The local electricity company sent a bill for Rs.280 for August after the close
of the month?s transactions.
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(g) Insurance premium of Rs.1200 was paid on a one year policy effective from
August 1.
Prepare a profit and loss account and a balance sheet.
OR
Q.5 MICHAEL JACKSON: WAS THE KING OF POP OR PAUPER?
Michael Jackson, nicknamed the ?King of Pop?, died in Los Angeles on June 25,
2009. The following information about his finances appeared in several
newspaper reports after his death:
? Jackson owned 50 per cent in the Sony ATV music publishing joint venture
that included much of the Beatles catalogue. His stake was valued at in $500
million to $1 billion. It has been used as collateral for multiple loans. The
catalogue now has about $300 million in loans secured against it, held by
Barclays.
? The Mijac catalogue that controls publishing rights to Jackson?s recordings is
worth an estimated $50 to $100 million. Warner Music administers the
catalogue and pays Mijac several million dollars in royalties each year.
Jackson?s hits are reportedly encumbered by a $73 million loan.
? Jackson bought Neverland, the 2600-acres Santa Barbara ranch in 1988 for
$17 million and fitted with fairground rides and a zoo for a further $35
million. Its value was estimated at $70 to $100 million before the singer?s
death. Jackson defaulted on a loan with Fortress last year but narrowly
avoided a foreclosure sale when Colony Capital bought the loan for $22.5
million. Colony Capital had already begun a multi-million dollar
refurbishment. If Neverland is opened to the public, it could be a big earner.
Elvis Presle?s Graceland makes $15 to $20 million a year profit.
? An accountant testified in 2005 that Jackson spent $20 million to $30 million
more than he made each year.
Required:
1. Prepare Michael Jackson?s balance sheet on June 25,2009 from the
information available. You need to prepare separate balance sheets for
the upper and lower range of the estimated amounts.
2. What additional information is required to prepare the balance sheet?
3. A commentator said: ?Michael Jackson lived like a king but died
awash in debt? - What do you think?
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This post was last modified on 19 February 2020