DISTANCE EDUCATION
M.B.A. DEGREE EXAMINATION, DECEMBER 2017.
First Semester
FINANCIAL AND MANAGEMENT ACCOUNTING
(upto 2012-13 Academic Year and 2013 Calendar Year)
Time Three hours Maximum 100 marks
SECTION A — x 8 40 marks)
Answer any FIVE questions.
All questions carry equal marks.
1. What is financial accounting? Explain any four principles
of financial accounting.
2. Distinguish between operating, financing and investing
activities in cash flow statement. Enumerate the sources
of cash.
3. Explain different categories of financial analysis?
4. 'Ratios are indicators-sometimes pointers but not in
themselves powerful tools of management'. In the light of
this statement, draw out the limitations of ratios.
5. Write a detailed note on 'Budget as a tool of planning'.
Sub. Code
14
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6. The below is the balance extracted from the book of
Mr. Arjun
Rs. Rs.
Capital 50,000 Sales 3,02,600
Bank overdraft 8,400 Return inwards 5,000
Furniture 5,200 Discount received 800
Buildings 40,000 Taxes paid 4.000
Creditors 26,600 General expenses 8,000
Opening stock 44,000 Salaries 18,000
Debtors 36,000 Commission paid 4,400
Rent received 2,000 Carriage inwards 3,600
Purchases 2,20,000
Adjustments:
Stock on hand on 31st Dec. was estimated at
Rs.40,120,
Write off depreciation on business buildings
Prepare final accounts for the year ended
31.12.2003
7. Prepare a Production budget from the following
information:
Product Estimated Estimated Desired stock
stock sales on 31.12.2000
on 1.1.2000
X 4000 40000 10000
Y NIL 25000 NIL
Z 10000 30000 NIL
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8. Following are the investment details of 3 Projects
Project Investment Cash In-flows
I year II year
Rs. Rs. Rs.
X 3000 6000
Y 3000 2000 4000
Z 3000 3000 3000
Calculate N.P.V. at 10% interest rate, the P.V. of Rs.1 for
I year 0.909 and for II year is 0.826. Which Project is the
best?
SECTION B — x 15 60 marks)
Answer any FOUR questions.
All questions carry equal marks.
9. Distinguish 'Management Accounting' and 'Financial
Accounting'. How does Management Accounting decision
help in decision-making. Discuss the use of management
accounting as a tool in
decision-making and
exercising control.
10. Discuss the methods used for evaluating and ranking
investment proposals. Make a comparative study of the
'internal rate of return approach' with the 'present value
approach' in choosing a capital expenditure project.
11. Mr. Raja started business on 1.4.2010 with a capital of
Rs.50,000 and bought furniture for Rs.10,000. On
30.9.2010, he borrowed Rs.25,000 from his wife at 9%p.a.
(Interest not yet paid) and introduced additional capital
Rs.7,500. He withdrew Rs.1,500 per month from business
for his household purposes. On 31.3.2011, his position
was as follows.
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Cash in hand Rs.1,000
Cash at bank Rs.13,000
Sundry Debtors Rs.24,000
Stock Rs.34,000
Bills Receivable Rs.8,000
Sundry Creditors Rs.2,500
Rent due Rs.750
Furniture to be depreciated by 10%. Compute his profit
for the year 2010-2011.
12. From the following Balance Sheet of M/s Madhu
Enterprises Ltd. calculate:
Current Ratio,
Liquidity Ratio,
Debt-equity Ratio,
Fixed Assets Ratio.
Balance Sheet (as at 31st December 2006)
Rs. Rs.
Share capital Fixed assets
400, preference Goodwill 6,000
shares of Rs.15 each 6,000 Land and Buildings 8,000
1,000 equity shares Machinery 16,000
of Rs.10 each 10,000 Current assets
General Reserve 1,000 Debtors 4,800
Debentures 14,000 Stock 2,000
Profit and Loss a/c 2,000 Cash 3,200
Creditors 3,600
Bank overdraft 2,400
Proposed dividend 1,000
40,000 40,000
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13. Blue Star Ltd. presents to you the following balance
sheets and profit and loss account
Blue Star Ltd
Balance Sheet as on 31-3-2000 and 31-3-2001
Liabilities 31.3.2000
Rs.
31.3.2001
Equity Share Capital 25,00,000 25,00,000
Profit and Loss account 20,75,000 23,65,000
14% Debentures 15,00,000 12,50,000
Sundry creditors 2,76,250 3,26,750
Expenses outstanding 54,500 68,500
Assets 31.3.2000
31.3.2001
Rs.
Fixed assets 40,00,000 40,50,000
Investments 6,25,000 2,50,000
Stock 10,33,250 12,67,750
Sundry debtors 4,00,000 4,50,000
Cash at bank 3,35,500 4,83,500
Goodwill 12,000 9,000
64,05,750 65,10,250
You art required to prepare cash flow statement for the
year ended 31st March 2001.
14. The following financial statement is summarized from
the books of Armstrong Ltd., as at 31st March 1999:
Capital and
Liabilities
31.03.99

Property and
Assets
31.03.99

Paid up capital 15,00,000 Fixed assets 16,50,000
Reserves and Stock 9,10,000
surplus 6,00,000
10% Debentures 5,00,000 Debtors 12,40,000
Bank overdraft 2,00,000 Furniture 1,60,000
Creditors 12,00,000 Cash 40,000
Total 40,00,000 Total 40,00,000
Prepare a common-size balance-Sheet.
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15. Amit company is considering a new project for which the
investment data are as follows:
Capital outlay Rs.20,00,000, Depreciation 20%.
Forecast of annual income before charging depreciation is
as follows
Year 1 Rs.1,00,000
2 Rs.1,00,000
3 Rs.80,000
4 Rs.80,000
5 Rs.40,000
Compute the pay-back period and ARR.
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