Download BU (Bangalore University) MBA 1st Semester 2015 Feb Accounting Managers Question Paper

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I Semester M.B.A. Degree Examination, Jan./Feb. 2015

(CBCS) (2014-15 & Onwards)

MANAGEMENT

Paper 1.3: Accounting for Managers

Time: 3 Hours Max. Marks: 70

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SECTION-A

Answer any five of the following questions. Each question carries 5 marks.

Answer to each theoretical question should not exceed 250 words. (5x5=25)

1. Explain the assumptions underlying accounting measurement.
2. Write a note on Quality of Earnings.

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3. Distinguish between cost control and cost reduction.
4. Explain the practical applications of Marginal Costing.
5. On September 1, 2012, Rashmi Sinha established Lovely Beauty Salon. The business engaged in the following transactions in the first month :
   1. Rashmi Sinha invested Rs. 50,000 cash in business
   2. Bought equipment for cash Rs. 15,000
   3. Took a bank loan Rs. 25,000

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   4. Bought supplies on credit Rs. 3,000
   5. Paid rent Rs. 12,500
   6. Paid creditors Rs. 1,500
   7. Received fee for services provided Rs. 29,000.
   You are required to analyze the effect of the above transactions on the accounting equation.

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6. XYZ Ltd., has prepared the following budget estimates for the year 2009-10.

   Sales in units	15,000
   Fixed expenses	Rs. 34,000
   Sales in volume	Rs. 1,50,000
   Variable cost per unit	Rs. 6

   You are required to :
   1. Find out P/V ratio, break-even point and margin of safety.
   2. Calculate the revised P/V ratio, break-even point and margin of safety in each of the cases:
      1. Decrease of 10% in selling price
      2. Increase of 10% in variable costs.

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7. Ajay Company reported a net profit after tax of Rs. 3,40,000 for the year ended 31-3-2007. The relevant balance sheet accounts on 31-3-2006 and 31-3-2007 are as follows:

   (Amount in Rs.)

   Particulars	31-3-2007	31-3-2006
   Inventories	59,000	72,000
   Debtors	94,000	61,000
   Pre paid Expenses	14,000	3,000
   Creditors	82,000	78,000
   Income Tax Payable	13,000	19,000

   Depreciation expenses of Rs. 49,000 and gain on sale of investment of Rs. 8,000 appeared on the Profit and Loss account for the year ended 31-3-2007. Calculate net cash flow from operating activities using indirect method.

SECTION-B

Answer any three of the following questions. Each question carries 10 marks.

Answer to each theoretical question should not exceed 500 words. (10×3=30)

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8. Define Human Resource Accounting. Explain the various valuation techniques of human resource accounting.
9. What are Annual Reports ? Discuss the mandatory disclosures in a Company's Annual Reports.
10. The profitability statement of G Co. Ltd., has been summarized as given below.

    Sales	15,00,000
    Direct Material	4,50,000
    Direct Wages	3,00,000
    Variable Overheads	1,20,000
    Fixed Overheads	4,40,000
    	13,10,000
    Profit	1,90,000

    The budgeted capacity of the company is Rs. 20,00,000 but the key factor is sales demand. It is proposed that in order to utilize the existing capacity, the selling price of the only product manufactured by the company should be reduced by 5%. You are requested to prepare a forecast statement which should show the effect of the proposed reduction in selling price and include any changes in costs expected during the coming year. The following additional information is given.
    1. Sales forecast Rs. 19,00,000 (after reduction)
    2. Direct material prices are expected to increase by 2%
    3. Direct wage rates are expected to increase by 5% per unit

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    4. Variable overheads are expected to increase by 5% per unit
    5. Fixed overheads will increase by Rs. 20,000.
11. The following is the Balance Sheet of Prashant Ltd., as on 31-3-2013

    Balance Sheet of Prashant Ltd.

    as at 31 March 2013

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    Liabilities and Equity	Amount ?	Assets	Amount ?
    Share capital Equity shares of 10% each	4,00,000	Fixed assets (Less: Depreciation)	6,10,000
    1,000 12% Preference shares of 100 each	1,00,000	Current assets: Stock-in-trade	1,60,000
    Reserve and surplus	1,00,000	Sundry debtors	1,20,000
    12% Debentures	2,00,000	Bills receivable	25,000
    Current liabilities Creditors	1,20,000	Cash in hand and bank	35,000
    Bank Overdraft	30,000
    Total	9,50,000	Total	9,50,000

    Revenue Statement

    For the Year Ended 31 March 2013

    Particular	Amount (*)
    Net sales (credit)	7,30,000
    Cost of sales	6,20,500
    Gross profit	1,09,500
    Administrative expenses	18,250
    Selling and distribution expenses	36,500
    	54,750
    Operating profit (before tax)	54,750
    Taxation	25,550
    Operating profit (after tax)	29,200

    From the given information, you are required to compute the following ratios :
    1. Current ratio
    2. Liquidity ratio
    3. Gross profit ratio

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    4. Debtor's velocity
    5. Net profit ratio
    6. Capital gearing ratio
    7. Proprietary ratio
    8. Stock working capital ratio

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    9. Administrative expenses ratio
    10. Debt-equity ratio.

SECTION-C

Case Study - Compulsory: (1x15=15)

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12. The following is the trial balance of Venkateshwara Ltd., as at 31.3.2012

    Debit	Credit
    Stock on 1st April 2011	7,50,000
    Purchases	24,50,000
    Wages	5,00,000
    Discounts	70,000	50,000
    Salaries	75,000
    Rent	49,500
    General Expenses Including Insurance	1,75,000
    Dividends Paid	90,000
    Bad Debts	48,300
    Cash in hand and at Bank	1,62,000
    Sundry Debtors and Creditors	3,75,000	1,79,500
    Plant and Machinery	2,90,000
    		Sales	35,00,000
    		Profit and Loss Account on 1st April 2011	1,50,300
    		General Reserve	1,55,000
    		Authorized capital and Issued Capital (Fully Subscribed) (1,00,000 Shares of Rs. 10 Each)	10,00,000
    Total	50,34,800	Total	50,34,800

    You are required to prepare a statement of Profit or Loss and a Balance Sheet for year ended 31st March, 2012 as per the Revised Schedule VI of the Companies Act.
    1. Closing Stock Rs. 8,20,000
    2. Depreciate machinery at 15% p.a.
    3. One month's rent at Rs. 54,000 p.a. was due on 31st March 2012
    4. Six months insurance was unexpired Rs. 3,750
    5. The Directors proposed a dividend of 8%.

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