M.Com. DEGREE EXAMINATION, NOVEMBER 2017.
Second Semester
Commerce
MANAGEMENT ACCOUNTING
(CBCS 2014 onwards)
Time 3 Hours Maximum 75 Marks
Part A (10 X 2 20)
Answer all questions.
1. Define Management Accounting.
2. State any two advantages of Management Accounting.
3. What is profitability ratio?
4. What is trend analysis?
5. Write a short note on fund flow statement.
6. What are cash equivalents?
7. What is Zero Base Budgeting?
8. Write a note on Master Budget.
9. What is contribution?
10. What is the main difference between 'Variable cost' and
'Margin of safety'?
Sub. Code
4MCO2C3
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Part B X 5 25)
Answer all questions.
11. Explain the scope of Management Accounting.
Or
What are the objectives of Management Accounting?
12. The summary of Balance Sheet data in respect of
A Ltd and B Ltd. is as under
A Ltd. B Ltd
Rs. Rs.
Building 1,00,000 4,50,000
Machinery 3,00,000 7,50,000
Share capital 4,50,000 14,50,000
Retained earnings 50,000 33,000
Debtors 1,15,000 1,60,000
Stocks 60,000 2,17,000
Cash 10,000 5,000
Prepaid expenses 5,000 3,000
Creditors 91,000 1,00,000
Liability for expenses
Preliminary expenses
9,000
10,000
17,000
15,000
Prepare common-size balance sheet.
Or
Find out the amount of creditors from the following
Sales Rs.60,000
Bills payable Rs.2,500
Creditors velocity 73 days
Gross profit on sales 10%
Opening stock of goods Rs. 5,000
Closing stock of goods Rs. 10,000
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13. From the following prepare a statement showing
changes in working capital during 2012.
Liabilities 31.12.2011 31.12.2012 Assets 31.12.2011 31.12.2012
Rs. Rs. Rs. Rs.
Equity capital 5,00,000 5,00,000 Fixed assets 6,00,000 7,00,000
Debentures 3,70,000 4,50,000 Long term
Tax payable 77,000 43,000 Investments 2,00,000 1,00,000
Creditors 96,000 1,92,000 Work-inprogress
80,000 90,000
Dividend payable 87,000 80,000 Stock 1,50,000 2,25,000
Debtors 70,000 1,40,000
Cash 30,000 10,000
11,30,000 12,65,000 11,30,000 12,65,000
Or
Statement of financial position of XYZ Ltd., is given
Liabilities 2013 2014 Assets 2013 2014
Rs. Rs. Rs. Rs.
Share capital
Creditors
P &L A/c
18,000
6,400
2,900
19,000
7,600
3,500
Cash
Debtors
Building
Patent rights
6,000
15,500
5,000
800
4,000
19,000
6,200
900
27,300 30,100 27,300 30,100
You are required to prepare a statement of flow of
cash.
14. Malar Ltd. sells two products A and B which are
produced in its special products division. Sales for
the year 2009 were planned as follows
1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
Product A 10,000 12,000 13,000 15,000
Product B 5,000 4,500 4,000 3,800
The selling prices were Rs.20 per unit and Rs. 50
per unit respectively for A and B. Average sales
returns are of sales and the discount and bad
debts amount to of the total sales.
Prepare sales budget for the year 2009.
Or
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Prepare Cash Budget for the period April — June
from the following data.
Months Sales
Rs.
Purchase
Rs.
Wages
Rs.
February 1,80,000 1,24,800 12,000
March 1,92,000 1,44,000 14,000
April 1,08,000 2,43,000 11,000
May 1,74,000 2,46,000 10,000
June 1,26,000 2,68,000 15,000
50% of credit sales is realized in the month
following the sale and the other 50% in the
second month following.
Creditors are paid in the month following the
month of purchase.
Wages are paid at the end of the respective
month.
Cash in hand 1st April — Rs. 25,000.
15. From the following data calculate:
P/V Ratio
Variable cost and
Profit
Rs.
Sales 80,000
Fixed expenses 15,000
Break even point 50,000
Or
From the following information relating to Palani
Bros Ltd., you are required to find out.
P/V ratio
Break even point
Profit
Margin of safety
Volume of sales to earn profit of Rs. 6,000.
Rs.
Total fixed cost 4,500
Total variable cost 7,500
Total sales 15,000
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Part C X 10 30)
Answer any three questions.
16. Distinguish between Management Accounting and
Financial Accounting.
17. The following data are worked out from the financial
statement for the year ended 30.9.2012. You are required
to reconstruct Balance Sheet as on 30.9.2012.
Fixed assets (after 30% depreciation) Rs. 10,50,000
Finished goods Turnover ratio (on cost of sales) 6 (times)
Fixed assets Turnover ratio (on cost of sales) 2 (times)
Gross profit on sales 25%
Net profit (before interest) Sales
Interest cover (Debenture interest at 8
Debt collection period (months) 1.5
Materials consumed Sales 30%
Stock of raw materials (months of consumption) 3
Current ratio 2.4
Quick ratio 1
Reserves/capital 0.21.
18. From the following Balance Sheets of A Co.Ltd., you
are required to prepare Fund Flow Statement.
Liabilities 2013 2014 Assets 2013 2014
Rs. Rs. Rs. Rs.
Equity share capital 2,40,000 3,60,000 Land 1,66,200 3,39,600
Share premium 24,000 36,000 Machinery 1,06,800 1,53,900
General reserve 18,000 27,000 Furniture 7,200 4,500
P L a/c 58,500 62,400 Stock 66,300 78,000
debentures 78,000 Debtors 1,09,500 1,17,300
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Liabilities 2013 2014 Assets 2013 2014
Rs. Rs. Rs. Rs.
Taxation provision 29,400 32,700 Bank 14,400 12,000
Creditors 1,00,500 1,09,200
4,70,400 7,05,300 4,70,400 7,05,300
Depreciation written off during the year on
Machinery Rs. 38,400 and on Furniture Rs. 1,200.
19. Kunal Products produces and sells a product for which
total capacity of 2,000 units exists. The following
expenses are for the production of 1,000 units of the
product which is sold at Rs.130 per unit.
Per unit
Rs.
Direct Materials 20
Direct wages 30
Administration overheads 20
Selling expenses fixed) 10
Distribution expenses fixed) 20
100
You are requested to prepare a flexible budget for the
production and sale of 1,200 units, 1,600 units and 2,000
units, showing clearly the marginal (variable) cost and
total cost at each level.
20. The following are the operating details of two plants
operating under the same management.
Plant A Plant B
Rs. Rs.
Sales 10,00,000 8,00,000
Variable cost 6,00,000 5,00,000
Fixed cost 2,00,000 1,00,000
Capacity of operation 100% 50%
It is proposed to merge both the plants.
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You are required to ascertain
Break even sales and break even capacity of the
merged plant;
Profit and profitability of operating the merged
plant at 90% of the capacity.
Capacity level of operation. if profit of Rs. 4,00,000
(the profit made by both plants before merger) has
to be made by the merged plant.
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