Seat No.: Enrolment No.
GUJARAT TECHNOLOGICAL UNIVERSITY
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MBA - SEMESTER 1 - EXAMINATION - SUMMER 2019
Subject Code: 3519201 Date: 14/05/2019
Subject Name: ACCOUNTING FOR MANAGERS (AFM)
Time: 02:30 PM To 05:30 PM Total Marks: 70
Instructions:
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- Attempt all questions.
- Make suitable assumptions wherever necessary.
- Figures to the right indicate full marks.
Q.1 Explain the following terms in brief: 14
- (a) Functions of Accounting
- (b) Accounting process
- (c) Qualitative characteristics of financial statements
- (d) Computerized Accounting
- (e) Fundamental accounting assumptions
- (f) Rules of Real account & Nominal account.
- (g) Users of Financial Statement
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Q.2 (a) Differentiate between Financial Accounting and Management Accounting. (7
(b) Journalize the below entries in the books of Rajini. 07
January 2018
- 1 Rajini started business with a capital of Rs. 50,000
- 2 She purchased furniture for Rs. 5,000
- 3 She bought goods on credit from Vinod for Rs. 8,000
- 14 She sold goods to Suresh for Rs. 5,000
- 15 She received cash from Suresh Rs. 3,000
- 18 She purchased goods for cash Rs. 12,000
- 25 She sold goods for cash Rs. 8,000
- 28 She paid rent Rs. 1,200.
- 31 She paid Vinod Rs. 3,000 on account.
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OR
(b) Using the following data complete the balance sheet. 07
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Gross profit (20% of sales) Rs. 60000
Share capital Rs. 50000
Credit sales to total sales 80%
Total assets turnover (on sales) 3 times
Closing stock turnover (to cost of sales) 8 times
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Average collection period (for 360 days) 18 days
Current ratio 1.6
Long term debt to equity 40%
Balance Sheet
| Share capital | ? | Fixed assets | ? |
| Long term debt | ? | Stock | ? |
| Creditors | ? | Debtors | ? |
| Cash | ? | ||
| ? | ? |
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(b) The following is the record of receipts and issues of material A in the factory 07 during a week.
April 2018
- 1 Opening balance 50 tonnes @ Rs. 10 per tone
- 2 Issued 30 tonnes
- 3 Received 60 tonnes @ Rs. 10.20 per tone
- 4 Issued 25 tonnes [Stock verification reveals of loss of 1 tonne]
- 5 Received back 10 tonnes [Previously issued at Rs. 9.15 per tone]
- 6 Issued 40 tonnes
- 7 Received 22 tonnes @ Rs. 10.30 per tone
- 8 Issued 38 tonnes
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You are required to prepare a Stores ledger account under
- 1) FIFO method
- i1) LIFO method.
OR
Q.3 (a) What do you mean by Accounting concepts? Explain any 5 accounting concepts 07 in detail.
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(b) On 1-1-2010, Ram purchased machinery of 72,000 and spent 6,000 for 07 Installation and 12,000 for repairs.
On 30-6-2012, he sold a part of the machinery costing Rs. 18,000 for Rs. 12,000. New machinery was purchased on the same day for Rs. 30,000 and spent Rs. 6,000 for transportation.
The depreciation was charged at 10% per annum on the original cost method. Show the machinery and depreciation account for 5 years.
Q.4 (a) Explain the concept of Trend Analysis with the help of an example. 07
(b) From the following Income Statement of ‘Raj Trading Company for the year 07 ending 31st March, 2016 and 2017, you are required to prepare a Comparative Income Statement and give your comments:
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Income Statement
For the year ended 2016 and 2017
| Particulars | 31.03.2016 Rs. | 31.03.2017 Rs. |
| Revenue From Operations | 6,00,000 | 7,20,000 |
| Add: Dividend Received | 30.000 | 90,000 |
| Total Revenue | 6,30,000 | 8,10,000 |
| Less: Cost of Goods Sold | 4,20,000 | 5,60,000 |
| Administration Expenses | 50,000 | 66,000 |
| Selling and Dist. Expenses | 25,000 | 23,000 |
| Interest on Debentures | 12,000 | 12,000 |
| Loss on Sale of Plant | 6,000 | 4,000 |
| Provision for Taxation | 40,000 | 48,000 |
| Net Profit | 77,000 | 97,000 |
OR
Q4 (a) Write a short note on IFRS? 07
(b) From the following Profit and Loss account, you are required to compute cash 07 from operations.
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Profit and Loss account for the year ended 31-03-2018
| Particulars | Rs. | Particulars | Rs. |
| To Salaries | 20000 | By Gross profit | 100000 |
| To Rent | 4000 | By Profit on sale of Land | 20000 |
| To Depreciation | 8000 | By Income tax refund | 12000 |
| To Loss on sale of machinery | 4000 | ||
| To Goodwill written off | 16000 | ||
| To Dividend proposed | 20000 | ||
| To Tax provision | 20000 | ||
| To Net profit | 40000 | ||
| 132000 | 132000 |
Q.S The following is the trial balance of Gupta Industries Ltd. for the year ending 31st March, 2018.
| Particulars | Debit | Credit |
| Stock, 1 April 2017 | 675000 | |
| Sales | 3060000 | |
| Wages | 270000 | |
| Share capital (Authorised capital 200000 shares of Rs. 10 each) | 200000 | 900000 |
| Discount | 27000 | |
| Purchases | 2205000 | |
| Carriage inward | 8550 | |
| Purchase returns | 90000 | |
| Patents & trademark | 43200 | |
| Salaries | 67500 | |
| Bills receivable | 45000 | |
| Sundry expenses | 63450 | |
| Bills payable | 63000 | |
| Rent | 36000 | |
| Debtors & Creditors | 247500 | 157500 |
| Plant & Machinery | 261000 | |
| Furniture & Fittings | 153000 | |
| Cash at bank | 415800 | |
| General reserve | 139500 | |
| Profit & loss account, 315 March 2017 | 54000 | |
| Total | 4491000 | 4491000 |
Adjustments:
- Outstanding rent amounted to Rs. 7200 while outstanding salaries Rs. 8100 at the end of the year.
- Make a provision for doubtful debts amounting to Rs. 4590.
- Stock on 31 March 2018 was valued at Rs. 792000.
- Depreciate plant and machinery at 14% and furniture & fittings at 18%.
- Amortise patents and trademarks at 5%.
- Allow interest on capital @ 8% of the profit before tax.
- Make a provision for income tax at 35%.
- The board of directors proposes a dividend at 10% for the year ended 31 March 2018 after transfer to General reserve at 5% of profit after tax.
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(a) Prepare Vertical Profit and Loss account for the year ending 31 March 2018. 07
(b) Prepare Vertical Balance sheet as on 31 March 2018. 07
OR
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Q.5 (a) Prepare Horizontal Profit and Loss account of Gupta Industries Ltd. for the year ending 31 March 2018.
(b) Prepare Horizontal Balance sheet of Gupta Industries Ltd. as on 31 March 2018.
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