Download JNTUH MBA 1st Semester 2017 July Financial Accounting and Analysis Question Paper

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Question Paper Code: CMB002

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Jawaharlal Nehru Technological University Hyderabad

MBA I Semester End Examinations (Supplementary) - July, 2017

Regulation: R16

FINANCIAL ACCOUNTING AND ANALYSIS

(Master of Business Administration)

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Time: 3 Hours

Max Marks: 70

Answer ONE Question from each Unit

All Questions Carry Equal Marks

All parts of the question must be answered in one place only

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UNIT I

1. (a) Discuss the meaning of Accounting and its importance to various users of Accounting Information. [7M]
   (b) Demonstrate the meaning and significance of the following GAAPs: [7M]
   1. Separate Entity Concept.
   2. Dual Aspect Concept.
   3. Accrual Concept.
   4. Conservatism Principle.

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2. (a) Describe the Meaning and various stages of Accounting Cycle. [7M]
   (b) Classify the following items into asset, liability, income and Expense: [7M]
   1. Copyrights
   2. Preliminary Expenses
   3. Pre-paid expenses

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   4. Outstanding expenses
   5. Bank Overdraft
   6. Sales
   7. Goodwill
   8. Stock

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   9. Tax payable
   10. Royalty Paid
   11. Accrued Commission
   12. Salaries
   13. Unearned interest

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   14. Wages

UNIT II

1. (a) Ms. Arora set up Ace Marketing Ltd., to provide consultancy. During a short period the company completed the following transactions. Prepare Journal entries to record the transactions. [7M]
   1. Ms. Arora invested cash in Ace's share capital Rs. 20,000
   2. Billed customers for services provided Rs. 5,600
   3. Paid assistant's salary Rs. 600

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   4. Bought computer on credit Rs. 4,400
   5. Received cash from customers billed earlier Rs. 1,350
   6. Took a bank loan Rs. 5000
   7. Paid creditors Rs. 2,000
   (b) Time Value company provides training on time management. The following are the account balances of the company on September 30, 2016. Prepare a Trial Balance. [7M]
   

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   Accounts Receivable	Rs.1,200
   Prepaid Insurance	Rs.1,400
   Building	Rs.15,000
   Retained Earnings	?
   Cash	Rs.1,500
   Revenue from services	Rs.12,500
   Creditors	Rs.2,300
   Rent Expense	Rs.1,000
   Dividends	Rs.750
   Salaries Expense	Rs.1,600
   Electricity Expense	500
   Share capital	Rs.7,500
   Office Equipment	Rs.3,000
   Telephone Expense	Rs.1,050

2. (a) On January 1, 2012, X Ltd., purchased a second-hand machine for Rs. 80,000 and spent Rs. 20,000 on its cartage, repairs and installation. The residual value at the end of its expected useful life of 4 years is estimated at Rs. 40,000. On September 30, 2013, this machine is sold for Rs. 50,000. Depreciation to be provided according to Straight Line Method. Prepare Machinery account for the first three years assuming that the accounts are closed on March 31, each year. [8M]
   (b) Prepare purchases book and purchase returns book in the books of Ms Soundarya Enterprise from the following transactions: [6M]
   

   Date	Transaction
   12/5/16	Goods of MRP Rs.25,000 purchased from Naveen Enterprises @20% trade discount.
   14/5/16	Goods valuing Rs.1,100 returned to Naveen Enterprises.
   16/5/16	Goods of MRP Rs.44,000 purchased from Satish Enterprises @10% trade discount.
   19/5/16	Goods of cost Rs.3,200 returned to Satish Enterprises.
   20/5/16	Goods costing Rs.19,000 purchased in cash from Naveen Enterprises.
   21/5/16	Goods costing Rs.11,000 purchased from Telelink Ltd.

UNIT - III

1. (a) The following transactions occur in the purchase and issue of a material: [8M]
   

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   2016
   January 1	Opening stock Nil
   January 1	Purchases 100 units @ Rs.30 per unit
   January 15	Issued 50 units
   February 1	Purchases 200 units @ Rs.40 per unit
   February 15	Issued 100 units
   February 20	Issued 100 units
   March 1	Purchases 150 units @ Rs.50 per unit
   March 15	Issued 100 units

   Prepare stores ledger under FIFO method from the above transactions
   (b) Discuss the meaning and types of Share Capital found in a balance sheet. [6M]
2. (a) D Ltd invited application to issue 10,000 equity shares of face value Rs.10 each at par. The amount to be paid as to Rs.4 at the time of application, Rs.2.50 on allotment, and the remaining amount on first and final call. The company received the application for 10,000 shares all the shares were allotted, the amount due on allotment as well as on first and final call was received in time in full. Pass necessary journal entries in the books of D Ltd. [8M]
   (b) Discuss the meaning and types of Debentures. [6M]

UNIT IV

1. (a) Following are the comparative balance sheets of Novo Company as at December 31. [8M]
   

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   Liabilities	2014 (Rs.)	2015 (Rs.)	Assets	2014 (Rs.)	2015 (Rs.)
   Share capital	70,000	74,000	Goodwill	10,000	5,000
   Profit/loss	10,040	10,560	Land	20,000	30,000
   Debentures	12,000	6,000	Trade Debtors (goods)	14,900	17,700
   Trade -Creditors	10,360	11,840	Stock-in-trade	49,200	42,700
   Provision for doubtful debts	700	800	Cash	9,000	7,800
   	1,03,100	1,03,200		1,03,100	1,03,200

   
   Additional Information:
   1. Dividends were paid totaling Rs.3,500.
   2. Land was purchased for Rs.10,000 and amount provided for the amortization of goodwill totaled Rs. 5,000.
   3. Debenture loan was repaid Rs. 6,000.
   Prepare funds flow statement of Novo Company.
   

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   (b) Describe the meaning of Funds Flow Statement. Compare Funds Flow with Income statement. Explain the uses of Funds flow statement. [6M]
2. (a) The Balance Sheets of VXL Limited as at December 31 of two years are given below: [8M]
   

   Assets	2016 (Rs.)	2015 (Rs.)
   Cash Balances	60,000	50,000
   Trade debtors	100,000	75,000
   Inventory	120,000	140,000
   Land	80,000	100,000
   Plant and Machinery	250,000	200,000
   Total	610,000	565,000
   Liabilities and Capital	2016 (Rs.)	2015 (Rs.)
   Trade Creditors	40,000	30,000
   Debentures	90,000	150,000
   Provision for depreciation on Plant	80,000	60,000
   Equity Share Capital	240,000	200,000
   Retained Earnings	160,000	125,000
   Total	610,000	565,000

   
   Cash dividends of Rs.25,000 have been paid during the year. Prepare a Cash flow statement for VXL Limited.
   (b) Describe the meaning of cash flow statement. Compare funds flow with cash flow statement. [6M]

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UNIT V

1. (a) Calculate the following ratios from the given balance sheet: [7M]
   1. Current ratio
   2. Fixed Assets to Net worth ratio
   3. Debt equity ratio
   4. Return on capital employed
   
   

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   Liabilities	Rs.	Assets	Rs.
   600 shares of Rs.100 each	60,000	Land	40,000
   General Reserve	35,000	Plant	20,000
   Dividend Equalisation Reserve	5,000	Machinery	27,500
   Long-term loans	20,000	Investments	25,000
   Bills payable	30,000	Inventories	30000
   Provision for tax	5,000	Bills receivable	13,500
   Profit & loss A/c Balance(cr) Last Year : 1,000 Current year: 20,000	21,000	Cash and bank	12,000
   		Preliminary expenses	8,000
   	176,000		176,000

   
   (b) Describe the meaning and types of Financial Statements. [7M]
2. (a) The following Trading and Profit and Loss Account is given: [8M]
   

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   Trading and Profit and Loss A/c. For the year ending 31st March 2016
   Rs.	Rs.
   To Opening stock	76,250	By Sales	500,000
   To Purchases	315,250	By Closing stock	98,500
   To Carriage	2,000
   To Wages	5,000
   To Gross profit	200,000
   	598,500		598,500
   To Administrative expenses	100,000	By Gross profit	200,000
   To Selling & distribution expenses	13,000	By Non operating incomes	6,000
   To Financial expenses	7,000
   To Other non-operating expenses	2,000
   To Net profit	84,000
   	206,000		206,000

   Calculate:
   1. Gross Profit ratio
   2. Net Profit ratio
   3. Operating ratio
   4. Operating profit ratio
   5. Current ratio

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   6. Stock turnover ratio
   (b) Describe the meaning and classification of Ratios. [6M]