Download JNTUH (Jawaharlal nehru technological university) MCA (Master of Computer Applications) 1st Sem (First Semester) Regulation-R17 2018 January 841AE Accounting And Financial Management Previous Question Paper
R17
Code No: 841AE
JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD
MCA I Semester Examinations, January - 2018
ACCOUNTING AND FINANCIAL MANAGEMENT
Time: 3hrs
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.
PART - A
5 ? 5 Marks = 25
1.a)
Explain the following accounting concepts
i) Depreciation
ii) Double Entry system
iii) Sole Proprietorship
iv) Materiality principle v) Ledger
[5]
b)
Compute the present value of the following cash flows at a discount rate of 12%:
i) Cash Flow of Rs. 800 received in years 8, 9, 10
ii) Cash Flow of Rs. 1100 received in years 1, 3, 5
[5]
c)
The Praxis Ltd. has total assets of Rs.10, 00,000 and its asset turnover is 3 times. Its Net
Profit Margin on Sales is 15%. What is its return on investment?
[5]
d)
Atom Ltd. has a Break Even point of 12,000 units. Its variable cost per unit is Rs.120. Its
annual fixed cost is Rs. 5, 00,000.
Determine:
i) The selling price
ii) The Degree of Operating Leverage at a quantity 18000 units.
[5]
e) Compare `Accounting Rate of Return' method with `pay back' method.
[5]
PART - B
5 ? 10 Marks = 50
2.
Amarender started an electronics service centre and conducted the following transactions
during the month of June 2017.
1. Invested Rs.200, 000 cash to start the repair shop.
2. Purchased equipment for Rs.45, 000 cash.
3. Paid Rs.3500 cash for June office rent.
4. Paid Rs.4500 cash for supplies.
5. Incurred Rs.5000 of advertising costs
6. Received Rs.20, 000 in cash from customers for repair service.
7. Withdrew Rs.3, 000 cash for personal use.
8. Paid part-time employee salaries Rs.4, 700.
9. Paid electricity bills Rs.2500.
10. Provided repair service on account to customers Rs.15, 000.
11. Collected cash of Rs.300 for services billed in transaction (10).
Prepare Ledger accounts and trail balance from the above transactions.
[10]
OR
3.a)
Discuss the various steps involved in Accounting Cycle.
b)
Differentiate between Straight Line Method and Written Down Value method.
[5+5]
4.
Home Appliances Ltd. is currently selling 10,000 units at a selling price of Rs.250. Its
variable cost per unit is 150. Annual Fixed Costs are Rs.9, 50,000.
a) Determine the operating profit at its current level of sales
b) Show the impact of a 12% increase in quantity of sales on its operating profit
c) Show the impact of a 15% decrease in variable cost on its operating profit
d) If the firm wants to achieve the breakeven point at 8,500 units, what should be the new
selling price?
[10]
OR
5.a)
Southern Ltd. has reported a total assets Rs.50, 00,000. The cost of debt before taxes is 9%.
The risk-free rate is 7% and the beta of the firm is 1.25. The return from the market index for
2017 is 14%. The tax rate for the firm is 25%. Determine the weighted average cost of capital
of Sothern Ltd. under the following capital structures:
i) 40% equity and 60% Debt ii) 50% equity and 50% debt iii) 70% equity and 30% debt
b)
Explain the following terms
i) Preference shares
ii) Earnings per share
iii) Bonus Shares
iv) Stock split
v) CAPM
[5+5]
6.
The following information is available for the two companies, Ind Motors Ltd. and Hi-tech
Motors Ltd. for the Financial Year 2016, the first year of their operation.
(Rs. thousands)
Ind Motors
High-tech
Cash
13,606
7,669
Debtors
23,045
19,951
Inventory
31,087
31,345
Other Current Assets
12,522
11,909
Current Liabilities
75,230
80,280
Revenue
115,225
79,804
Cost of Goods Sold
75,000
57,700
Operating Expenses
19,250
12,200
Interest on Borrowings
500
400
Tax rate
25%
25%
Preference Dividend
400
400
No. of Equity Shares of outstanding (in
thousands)
3000
3000
Determine the following ratios for the two companies and write your observations:
a) Gross Profit
b) Net Profit c) Earnings per share d) Times interest earned
e) Working Capital
[10]
OR
7.
The following transactions were reported for Mohit Corporation Ltd. for the Financial Year
2016. The Cash balance at the beginning of the year was 7,500.
1) Borrowed cash from the bank: 20,000
2) Issued shares for cash: 30,000
3) Invested cash in the debentures of Beta Company: 20,000
4) Performed services and collected cash: 21,500
5) Paid cash for operating expense: 12,500
6) Purchased equipment for cash: 15,000
7) Paid dividends to shareholders: 1000
8) Repaid the bank loan: 6,000
9) Paid interest on Bank Loan: 2,000
10) Received interest on debentures: 2,000
Required:
Classify the transactions into operating, investing and financing activities and determine
the cash balance at the end of the year.
[10]
8.a)
TS Industrials has provided the following information.
Current level of sales: 15,000 units
Selling Price per unit: Rs.180;
Variable Cost per unit: Rs.100;
Annual Fixed Costs: Rs.8, 00,000
Required: Prepare a flexible budget showing the operating profit at the following levels of
sales
i) 10,000 units ii) 12,000 units
iii) 16,000 units
iv) 20,000 units
b)
Discuss the use of marginal costing in various areas of managerial decision making.[5+5]
OR
9.
Explain the following concepts with suitable examples
a) Cash Budget
b) Contribution margin
c) Sell or process further
d) Angle of incidence
e) Semi-variable costs
[10]
10.
The capital structure of Innovate India Products Ltd. in book value terms is as follows
Source
Rs.million
Equity Share Capital (20 million 250
shares of Rs.10 face value)
Preference Capital, 11% (600,000 60
shares of Rs.100 face value)
Retained earnings
500
Debentures,
12%
(10,00,000 100
debentures, Rs.100 face value)
Term Loans, 10%
100
Total sources
1010
The next expected dividend per share is Rs.3.00. The dividend is expected to grow at the rate
of 10%. The market price per share is Rs.70. Preference shares, redeemable after 10 years,
currently selling for Rs.90.00 per share. Debentures redeemable after 5 years, are selling for
Rs.95 per debenture. The tax rate for the company is 35%. Determine the weighted average
cost of capital using book value weights.
[10]
OR
11.
Hyderabad Engineers Ltd. is considering two mutually exclusive projects, P and Q, which
require an initial outlay of Rs.70 million each. The cash flow estimates are given below:
Year
Project A Project B
1
15
40
2
20
35
3
30
15
4
35
10
a) Which project is to be selected on the basis of payback period?
b) Which project is to be selected on the basis of NPV, if the discount rate is 14%?
c) Which project is to be selected on the basis of NPV, if the discount rate is 10%?
[10]
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This post was last modified on 16 March 2023