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Seat No.: Enrolment
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA(International Business) SEMESTER 1 EXAMINATION WINTER 2018
Subject Code: 1519301 Date:24/12/2018
Subject Name: International Accounting Practice
Time: 10:30 am to 1:30 pm Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1
Explain the following terms:
Cost Centre
Cost Unit
Trend Analysis
Double Taxation
International Finance
Financial Reporting
Flexible Budget
14
Q.2

Define International Accounting. Discuss the factors that have contributed to the development of International Accounting.
07

State and Explain difficulties encountered in International Accounting Practices. Suggest measures to overcome these difficulties.
07
OR

Differentiate US GAAP Indian GAAP.
07
Q.3

Discuss the scope of International Financial Management and list out the functions of International Finance Manager.
07

XYZ Ltd produced and sold 1,000 mobile during the year 2009. Selling Price per unit is Rs. 280. The particulars are as under:
Particulars
Amount
Materials
1,20,000
Direct Wages
90,000
Direct Expenses
10,000
Factory Expenses Variable)
15,000
Office Expenses (Fixed)
5,000
Selling Expenses Variable)
10,000
During the year 2010, it was estimated that 1500 mobiles phones will be produced and sold. The additional information is as under:
Direct wages per unit will decrease by 20%.
Fixed Factory expenses will increase by Rs. 1500
Fixed office and fixed selling expenses will increase by 20%.
25% of profit is estimated on cost.
Prepare: Cost Sheet based on per unit cost and total cost for 2009.
Estimated Cost Statement (Tender Sheet) based on per unit cost and total cost for 2010.
07
OR
Q.3

What is meant by International Tax Planning? Discuss the objectives of International Taxation and explain Tax Havens.
07
2

A product of company passes through process B and C. The wastage of process A B is sold at Rs. 10 of 100 units. The wastage of process C is sold at Rs. 80 of 100 units. Following details are available:
Particulars
Process A Rs.
Process B Rs.
Process C Rs.
Materials
12,000
8,000
4,000
Direct Wages
16,000
12,000
6,000
Direct Expenses
2,440
1,404
8,924
Other Factory Charges
3,500
3,800
4,200
Produced Units
19,500
18,800
16,000
Normal Wastage


10%
20,000 Units were entered in process A at Rs. 1 per unit. Prepare Process Accounts of all three processes and prepare abnormal loss a/c and abnormal gain a/c.
07
Q.4

Discuss merits and demerits of Budgeting.
07

The following forecasts have been made for ABC Ltd for the period January to April 2010.
January
February
March
April
Sales
Rs. 75,000
Rs. 1,05,000
Rs. 1,80,000
Rs. 1,05,000
Raw Materials
70,000
1,00,000
80,000
85,000
Manufacturing Expenses
10,000
20,000
29,000
16,000
Loan Instalment
1,000
11,000
21,000
21,000
Additional Information:
All Sales are made on credit basis, 2/3 of debtors are collected in the same month and balance in the next month. There is no expected bad debt. The debtors on January 2010 were Rs. 30,000.
The minimum cash balance, the firm must have is estimated to be Rs. 5,000, however, the cash balance on January was Rs. 6,500.
Borrowing if any, can be made in multiple of Rs. 100 only.
Prepare cash budget for the period of 4 months (ignore interest on borrowing).
07
OR
Q.4

Write a note on managerial uses of Marginal Costing.
07

From the following information calculate:
P.V Ratio
Break Even Point in Rs.
Expected Profit when Sales is Rs. 15,00,000
Amount of Sale, when loss is Rs. 80,000
Margin of Safety for the year 2005-06.
Year
Cost
Profit or Loss
2004-05
8,20,000
20,000
2005-06
11,20,000
80,000
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Q.5
The Trail Balance of ABC Ltd as on 31-03-2013 is as under:
Particulars
Amount
Particulars
Amount
Land Building
8,00,000
Share Capital:
Plant Machinery
6,00,000
12% Preference Shares
3,00,000
Furniture
1,20,000
Equity Shares
12,00,000
Purchases
18,60,000
10% Debentures
3,00,000
Opening Stock
1,40,000
Sales
32,00,000
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3
(Cont…)
Particulars
Amount
Particulars
Amount
Goods Returned
80,000
Goods Returned
60,000
Debtors
4,00,000
Creditors
2,00,000
Wages
6,80,000
Loan from directors
40,000
Octroi
1,80,000
Interest on Investments
16,000
Selling Distribution Expenses
40,000
Staff Pension Fund
16,000
Carriage Outward
16,000
Bills Payables
20,000
Administrative Expenses
1,70,000
Fixed Deposits
48,000
Telephone Deposit
20,000
General Reserve
1,40,000
Directors fees
20,000
Share Forfeiture A/c
20,000
Interest on Debentures
12,000
Profit Loss A/c
60,000
Bills Receivables
40,000
Cash Bank
50,000
Discount on Debentures
80,000
Investments
3,00,000
Loose Tools
12,000
56,20,000
56,20,000
Additional Information:
1. Write off Rs. 10,000 of discount on debentures.
2. Closing stock is valued at Rs. 2,80,000
3. Depreciate Land Building, Plant Machinery and Furniture by 10%.
4. Transfer Rs. 40,000 to General Reserve
Prepare final accounts of the company as per the Companies Act.
OR
Q.5

The following information is obtained from the books of Naman Ltd:
Current Ratio
2.5
Liquid Ratio
1.5
Working Capital
Rs. 6,00,000
Stock Turnover Ratio
(Cost of Sales/Closing Stock)
8
Gross Profit Ratio
20%
Debtors Ratio
2 Months
Fixed Assets/Shareholders Fund
0.80
Find out following information:
1. Current Assets 2. Current Liabilities 3. Cost of Sales 4. Gross Profit
5. Debtors 6. Fixed Assets 7. Shareholders' Fund
07

The balance sheet of Vinit Ltd is given below. Analyze financial position of Vinit Ltd using technique of comparative financial statement (Balance Sheet):
Liabilities
31-03-2005
(Amount in Rs.)
31-03-2006
(Amount in Rs.)
Preference Share Capital
1,00,000
2,00,000
Equity Share Capital
5,00,000
10,00,000
General Reserve
1,00,000
2,50,000
Accounts Payable
1,00,000
2,00,000
Outstanding Expenses
50,000
50,000
Profit Loss Account
2,00,000
3,00,000
10,50,000
20,00,000
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(Cont..)
Assets
31-03-2005
(Amount in Rs.)
31-03-2006
(Amount in Rs.)
Fixed Assets
4,00,000
10,00,000
Investments
3,00,000
1,00,000
Receivables
2,00,000
4,00,000
Inventories
1,00,000
4,00,000
Cash at Bank
50,000
1,00,000
10,50,000
20,00,000
07