DISTANCE EDUCATION
M.C.A/M.C.A. (Lateral) DEGREE EXAMINATION, MAY 2017.
Fourth Semester
ACCOUNTING AND FINANCIAL MANAGEMENT
(2005 to 2010 Calendar Year)
Time Three hours Maximum 100 marks
Answer any FIVE questions.
20 100)
1. Rectify the following errors by using Suspense Account
Sales day book was overcast by Rs. 100
A sale of Rs. 50 to x was wrongly debited to y account
General expenses Rs. 18 was posted in the account
as Rs. 80
A bills receivable for Rs. 155 was written in bills
payable book. The bill was given by p.
Legal expenses Rs. 119 paid to Raja was debited
to his personal account
Cash received from C. Dass was debited to G. Dass
Rs. 150
While carrying forward the total of one page of
purchase book to the next, the amount of Rs. 1,235
was written as Rs. 1,325
Pass necessary entries for the rectification of about
errors and show suspense account.
Sub. Code
42
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2. "Analysis without interpretation is meaning less and
interpretation without analysis is impossible" Discuss.
3. The following were the Balance Sheet of Anil Corporation
as on 31st December 2000 and 1999. Prepare a source and
application of funds statement with a supporting
schedule of working capital.
Balance Sheet of Anil Corporation
Liabilities 2000
Rs.
1999
Rs.
Assets 2000
Rs.
1999
Rs.
Accounts payable 12,000 15,000 Cash 45,000 30,000
Bonds payable
Reserve for
depreciation on
plant
60,000
19,000
20,000
10,000
Account
receivable
Merchandise
inventory
42,000
33,000
50,000
20,000
Common stock 1,20,000 1,00,000 Plant 1,50,000 1,00,000
Surplus 59,000 55,000
2,70,000 2,00,000 2,70,000 2,00,000
The Surplus account on 31st December, 2000 was as
follows
Surplus Account
Rs. Rs.
2000 2000
June 20 To Cash dividend 12,000 Jan. 1 By Balance b/d 55,000
Dec. 31 To Balance c/d 59,000 Dec. 31 By Net profit for
the year 16,000
71,000 71,000
4. Given the following information for ABC company at the
end of 1999 determine balances for the income statement
and the balance sheet
Net sales Rs. 1,00,000
Debtor's turnover ratio based on net sales 2
Inventory turnover ratio 1.25
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Fixed assets turnover ratio 0.8
Debt Assets ratio 0.6
Net profit margin
Gross profit margin 25%
Return on investment
ABC Company
Income statement (for the year ending Dec. 31, 1999)
Sales Rs. 1,00,000
Cost of good's sold
Gross profit
Other expenses
Earning before tax
Taxes 50%
Earnings after tax
Balance Sheet (as on 31st Dec. 1999)
Liabilities Rs. Assets Rs.
Equity Net fixed assets
Long term debt Inventory
Sport term debt 50,000 Debtors
Cash
Total Total
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5. From the following information about materials, prepare
a material ledger account using last in first out material
2003
July 1 Opening balance 800 units Rs. 2.50
July 8 Purchase of materials 900 units Rs. 2.60
July 12 Issue of materials 700 units
July 15 Purchase of materials 600 units Rs. 2.70
July 20 Issue of materials 650 units
July 25 Purchase of materials 800 units Rs. 2.85
July 27 Purchase of materials 500 units Rs. 2.90
July 29 Issue of materials 600 units
July 31 Issue of materials 400 units
6. A factory has three production departments and two
service departments. The overhead departmental
distribution summary shows the following
Departments Rs.
A 6,50,000
B 6,00,000
C 5,00,000
P 1,20,000
Q 1,00,000
The service department expenses are allotted on a
percentage basis as follows
Production
departments
Service
departments
Service department P 30 40 15 15
Service department Q 40 30 25 5
Show how the expenses of the two service departments
are to be charged to production department under
"repeated distribution" method and under "simultaneous
equation method".
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7. A practicing charted accountant now spends Re. 0.90 per
kilometre on taxi fares for his client's work. He is
considering two other alternatives, the purchase of a new
small car or an old bigger car.
The estimated cost figures are
Items New Small Car
Rs.
Old Bigger Car
Rs.
Purchase price 35,000 20,000
Sale price, after 5 years 19,000 12,000
Repairs and servicing
(per annum)
1,000 1,200
Taxes and insurance per litre 1,700 700
Petrol consumption per litre 10 km 7 km
Petrol price Rs. 3.50 per litre
He estimates that he does 10,000 km, annually. Which of
the three alternatives will be cheaper? If his practice
expands and he has to do 19,000 km per annum, what
should be the decision? At how many km per annum will
the cost of the two cases break-even and why? Ignore
interest and income tax.
8. The following information relates to a flexible budget at
60% capacity. Find out the overhead casts at 50% and
70% capacity and also determine the overhead rates
Expenses at 50% capacity
Rs.
Variable overheads
Indirect labour 10,500
Indirect materials 8,400
Semi-variable overheads
Repairs and maintenance
fixed, 30 variable)
7,000
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Expenses at 50% capacity
Rs.
Electricity fixed,
50% variable)
25,200
Fixed overheads
Office expenses including
salaries
70,000
Insurance 4,000
Depreciation 20,000
Estimated direct labour hours 1,20,000