Download JNTU-Hyderabad MBA 1st Sem R17 2019 May 741AC Financial Accounting And Analysis Question Paper

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Code No: 741AC R17

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD

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MBA I Semester Examinations, April/May-2019

FINANCIAL ACCOUNTING AND ANALYSIS

Time: 3hours Max.Marks:75

Note: This question paper contains two parts A and B.

Part A is compulsory which carries 25 marks. Answer all questions in Part A. Part B consists of 5 Units. Answer any one full question from each unit. Each question carries 10 marks and may have a, b, c as sub questions.

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PART - A 5 × 5 Marks = 25

1. a) Accounting has been often called the language of business. Do you agree? What could be deficient with this description? [5]
2. b) What is depreciation? What is the objective of providing for depreciation? List out the various methods of depreciation. [5]
3. c) What is goodwill? How is it treated in the books of accounts? [5]
4. d) What information can be obtained from cash flow? Explain how cash flow statements are prepared. [5]

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5. e) Explain the differences between horizontal and vertical analysis. [5]

PART - B 5 × 10 Marks = 50

1. 2. Classify the following under Personal, Real and Nominal account. a) capital account b) accrued interest c) interest on capital d) interest on drawings e) goodwill f) patent and trade marks g) salary h) rent i) current account of a partner j) fixtures [10]

   OR

   3.a) Describe the basic concepts and conventions of accounting. b) What is basic accounting accounting equation? [7+3]
2. 4. The total debit side of a Trial Balance of a company as at 31st Dec 2017 is 25,000 and credit side is Rs. 5,000 The following mistakes were discovered:
   

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   Particulars Correct fig. Rs Fig. in Trial Balance. Rs.
   Opening stock 17,500 25,700
   Rent and rates 250 520
   Sundry creditors 15,000 5,000
   Commission received 750 750 taken on the debit side
   

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   Miscellaneous income 60 30
   Ascertain the correct total of Trial balance. [10]

   OR

3. 5. Following are the extracts from the Trial balance of a firm as on 31st March 2017.
   Name of the account Dr. (Rs.) Cr. (Rs.)
   

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   Furniture and fittings 4,00,000
   Motor vehicles 2,00,000
   Plant 2,00,000
   Additional information:
   a) Furniture of Rs. 20,000 was purchased on 1st July 2016. Write 10% off the furniture.
   

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   b) Motor vehicle of Rs.20,000 was acquired on 1st July 2016. Depreciate the motor vehicles at 20% p.a.
   c) The plant of Rs. 20,000 was acquired during the year, charge depreciation on plant at 10% p.a.
   Pass necessary journal entries and show how the items will appear in the firm's final accounts. [10]
4. 6.a) Calculate the missing figure:
   Capital at the Rs. 18,000
   

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   Capital introduced during the year Rs. 3,000
   Drawings Rs. 4,000
   Loss Rs. 2,000
   Capital at the beginning
   b) Calculate the capital of Mr.Ganesh as at 31st December 2015 from the following information. [3+7]

   OR

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5. 7. Determine the value of stock as per books of AT Ltd.as at 31st march 2016 from the following information:
   a) The cost of stock as per physical verification as on 24 the March amounted to Rs.1,00,000.
   b) Purchases as per Purchase Book after stock taking till 31st March amounted to Rs. 1,00,000 and included the following:
   Rs. 5,000 for goods received till 23rd March.
   

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   Rs. 10,000 for goods received on 1st April
   c) Sales as per Sales Book after stock taking till 31st March amounted to Rs. 1,00,000 and included the following:
   Rs. 5,000 for goods delivered till 23rd march.
   Rs. 10,000 for goods delivered on 1st April.
   d) Goods are sold by the trader at a profit of 25% on cost.
   

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   Also determine the cost of physical stock as on 31st March 2016. [10]
6. 8. The following information and the balance sheet relate to Shyamsons Ltd.
   Particulars Year 1 Rs. Year 2 Rs.
   Assets
   cash 10,000 15,000
   

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   Receivables 20,000 25,000
   Inventory 20,000 35,000
   Plant and machinery at cost 85,000 85,000
   Less: accumulated depreciation (15,000) (10,000)
   1,20,000 1,50,000
   

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   Liabilities and capital
   Sundry creditors 8,000 10,000
   Outstanding expenses 7,000 10,000
   Debenture payable 10,000 5,000
   Long term loans 5,000 25,000
   

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   Capital 50,000 50,000
   Retained earnings 40,000 50,000
   1,20,000 1,50,000
   Net profit for the period after charging Rs.5,000 on account of depreciation was Rs.20,000. A piece of equipment costing Rs.25,000 on which depreciation accumulated in the amount of Rs.10,000 was sold for Rs.10,000. Dividend paid during the year amounted to Rs.10,000.
   Prepare a Source and use of funds statement. [10]

   OR

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7. 9.a) How does the statement of cash flows differ from the funds flow statement?
   b) How will the following transactions be shown in the statement of cash flows:
   i) Acquisitions of the assets of another company company by issuance of shares for Rs.1,60,000.
   ii) conversion of 10,000 preference shares of Rs. 100 each to 50,000 equity shares at a premium of Rs. 10 per share.
   

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   111) Entering into finance lease for a new plant with a value of Rs. 2,30,000? [6+4]
8. 10. The National Bank Limited has been approached by two customers for a short term loan of Rs.50,000. The following summarized financial information is available from the latest financial statements:
   Particulars Granny foods Rs. Home foods Rs.
   Net sales 9,10,000 7,50,000
   Gross profit margin 3,82,200 2,92,500
   

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   Interest expense 20,000 8,200
   Income tax 75,000 50,000
   Profit after tax 82,000 56,250
   Inventories 90,000 65,200
   Debtors 70,000 56,000
   

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   Cash 6,000 18,000
   Current liabilities 1,82,600 1,16,000
   Long term liabilities 1,60,000 1,30,000
   Shareholders equity 1,80,000 1,40,000
   The bank intends to accept one of the two loan requests. Which customer's loan request should be accepted? Why? [10]

   OR

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9. 11.a) A five year comparative analysis of Low Light Company's current ratio and quick ratio follows:
   Particulars Year 2005 Year 2006 Year 2007 Year 2008 Year 2009
   Current ratio 1.19 1.85 2.50 3.40 4.02
   Acid test ratio 1.15 1.02 0.98 0.72 0.50
   

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   i) What has been happening on the liquidity of Low Light Company over the five years presented?
   ii) Considering both ratios what does the trend indicate about, what has happened to the makeup of Low Light's current assets over the five year period?
   b) What is solvency? Define and explain two of the ratios for solvency. [5+5]

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