Download BU (Bangalore University) MBA 1st Semester 2016 Feb Accounting Managers Question Paper

SECTION-A

Answer any five of the following questions. Each question carries 5 marks. (5x5=25)

1. What are the differences between Financial Accounting and Management Accounting?

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2. How is depreciation for partial periods recorded?
3. What procedure would you adopt to study the liquidity of firm?
4. Calculate stock turnover ratio from the following data:
   • Stock at the beginning of the year: Rs. 10,000/-
   • Stock at the end of the year: Rs. 5,000/-
   • Purchases: Rs. 25,000/-

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   • Carriage inwards: Rs. 2,500/-
   • Total Sale: Rs. 50,000/-
   • Cash Sales: Rs. 5,000/-
5. Define standard costs and briefly indicate how they may be used by management in planning and control.
   1. Prepare common-size income statement for 2016 and 2015.

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   2. What caused Karl's profitability to decline so dramatically in 2016?
   3. Analysis: in 2016 Karl's operating income was less than its interest expense. Does this mean that Karl was unable to make its interest payments in 2016? Explain.
6. How are the following items treated in determining net cash flow from operating activities:
   1. interest paid
   2. interest received

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   3. dividend paid

4. dividend received
5. gain on sales of investments

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6. loss on exchange of plant; and
7. gain on redemption of debenture?

SECTION-B

Answer any three questions. Each question carries ten marks. (3x10=30)

8. Form the following particulars, calculate;
   1. Break-even point in terms of sales value and in units,

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   2. Number of units that most sold to earn a profit of Rs. 1,00,000/-.
   • Fixed factory overhead cost 1,20,000
   • Fixed selling overhead cost 2,400
   • Variable manufacturing cost per unit 24
   • Variable selling cost per unit 6

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   • Selling price per unit 48
9. What are the differences between current liabilities and long term liabilities?
10. In Department 'A' the following data is submitted for the week ending 31st October:
    • Standard output for 40 hours per week 1,400 units
    • Standard fixed overhead Rs.1,400

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    • Actual output 1,200 units
    • Actual hours worked Rs. 32 hrs.
    • Actual fixed overhead Rs. 1,500
    Prepare a Statement of Variance
11. Preparation of Adjusting entries and Financial Statements. Indian Business Service Ltd. was set up on January 1, 2009. Its Trial Balance on January 31, 2009 was as follows:

    Account	Debit	Credit
    Buildings	15,000
    Office equipment	12,000

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The following additional information is available:

1. The building is expected to be useful for 10 years and the office equipment has an estimated useful life of four years. None of these assets are expected to have any salvage value.
2. The inventory of office supplies on January 31 is Rs. 970.
3. Services for Rs. 900 were provided to customers in January although no bills have been raised.

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4. Services for Rs. 720 were provided to customers who had made full advance payments.
5. Salaries of staff for the second fortnight totaling Rs. 3,100 have not been paid.
6. The telephone company sent a bill for Rs. 480 for January after the close of the month's transaction.
7. The company paid six month's rent as advance on January 1.

Required:

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1. Prepare adjusting entries and post them to the T accounts.
2. Prepare an adjusted Trial Balance, a Profit and Loss Account, a statement of retained earnings, and a Balance Sheet.

SECTION-C

(1x15=15)

12. Determining Net Cash Flow from Operating Activities-Indirect Method: Dutt Company's Profit and Loss Account for the year ended June 30, 2015 is as follow:

    Dutt Company: Profit and Loss Account (In INR)

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    For the Year Ended June 30, 2015

    Sales	75,800
    Gain on sales of investments	1,200
    Interest income	900
    Dividend from subsidiaries	300
    Cost of goods sold	43,900
    Depreciation Expense	6,700
    Selling and Administration expense	8,500
    Interest Expense	1,100
    Loss on sales of plant and machinery	800
    Profit before income tax	17,200
    Income tax	8,300
    Profit after Tax	8,900

    Relevant Balance Sheet accounts on June 30, 2015 and 2014 are as follows:

    	June 30, 2015	June 30, 2014
    Inventories	9,300	7,900
    Debtors (net of provision for Doubtful Debts of Rs.1,600 and Rs. 800)	6,600	5,300
    Prepaid Expenses	1,100	800
    Creditors	8,400	6,300
    Bill Payable	2,100	6,500
    Income Tax Payable	2,100	2,800

    Selling and Administrative Expenses included bad debt expense of Rs. 1,500.

    During the year ended June 30, 2015, Debtors totaling Rs. 700 were written off.

    Required: Compute Net Cash Flow from operating activities using the Indirect method.

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