DISTANCE EDUCATION
M.C.A./M.C.A. (Lateral) DEGREE EXAMINATION,
MAY 2017.
Fourth Semester
ACCOUNTING AND FINANCIAL MANAGEMENT
(2010 Academic Year Onwards)
Time Three hours Maximum 100 marks
SECTION A — 8 40 marks)
Answer any FIVE questions.
1. Briefly explain various concepts of accounting.
2. From following Balance Sheets prepare a statement of
changes in working capital.
Balance Sheets
Liabilities 2005
Rs.
2006
Rs.
Assets 2005
Rs.
2006
Rs.
Equity
capital
5,50,000 5,50,000 Fixed assets 6,00,000 7,00,000
Debentures 3,70,000 4,50,000 Long-term
investments 2,00,000 1,00,000
Tax payable 77,000 43,000 Work-in-progress 80,000 90,000
Creditors 96,000 1,92,000 Stock 1,50,000 2,25,000
Bills payable 37,000 30,000 Debtors 70,000 1,40,000
Cash 30,000 10,000
11,30,000 12,65,000 11,30,000 12,65,000
Sub. Code
401
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3. Calculate the material cost variance, material price
variance and material usage variance from the following
Standard Actual
Quantity Unit price Total Quantity Unit price Total
Material A 100 20 200 50 30 150
Material B 200 30 600 100 60 600
Material C 200 60 1200 150 50 750
4. Prepare a production budget for three months ending
March 31, 2009, for a factory producing four products, on
the basis on the following information.
Type of
product
Estimated stock
on 1st, Jan, 2015
Estimated sales
during Jan
March 2015
Estimate stock
on Mar, 31,
2015
A 2,000 10,000 3,000
B 3,000 15,000 5,000
C 4,000 13,000 3,000
D 3,000 12,000 2,000
5. From the following particulars prepare cost sheet.
Rs.
Raw materials 1,00,000
Direct wages 40,000
Factory overheads 30,000
Administrative overheads 25,000
Selling and distribution overheads 30,000
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6. From the following Profit and Loss Account of X Ltd. for
the year ending 31st March, 2007 you are required to
calculate Gross profit ratio Net profit ratio
Operating profit ratio and Operating ratio.
Profit and Loss Account
Particulars Rs. Particulars Rs.
To Opening Stock 2,50,000 By Sales 18,00,000
To Purchase 10,50,000 By Closing Stock 1,50,000
To Gross Profit 6,50,000
19,50,000 19,50,000
To Selling and
Distribution expenses
1,00,000 By Gross Profit 6,50,000
To Administration
Expenses
2,30,000 By Profit on sale of
fixed assets
50,000
To Finance Expenses 20,000
To Net profit 3,50,000
7,00,000 7,00,000
7. Write a note on Time Value of Money and its significance.
8. Explain about zero base budgeting.
SECTION B — × 15 60 marks)
Answer any FOUR questions.
9. From the following information you are required to
prepare a Balance Sheet
Current Ratio 1.75
Liquid Ratio 1.25
Stock Turnover Ratio (Cost of Sales/Closing Stock) 9
Gross profit Ratio 25%
Debt collection period 11/2 months
Reserves and Surplus to Capital 0.2
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Turnover of Fixed Assets 1.2
Capital Gearing Ratio 0.6
Fixed Assets to Net worth 1.25
Sales for the year Rs. 12,00,000.
10. The following is the trial balance of Mr. Kumar as on
31st March, 2008
Debit
Rs.
Credit
Rs.
Sales 1,20,000
Purchases 90,000
Wages 5,000
Opening stock 12,000
Sundry Debtors 22,000
Sundry Creditors 11,000
Bills receivable 10,000
Bills payable 8,000
Bad debts 2,000
Carriage inwards 1,000
Telephone charges 2,000
Printing stationery 500
Investments 6,000
Interest 800
Land buildings 40,000
Rent 3,200
Drawings 3,000
Cash 1,500
Furniture 5,000
Capital 57,000
2,00,000 2,00,000
Adjustments
Closing stock is valued at Rs. 22,000.
Wages outstanding Rs. 300.
Interest receivable amounts to Rs. 200.
Rent received in advance amounts to Rs. 400.
Depreciation 10% is required on furniture.
Prepare Final accounts.
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11. Assuming that the cost structure and selling prices
remain the same in periods I and II find out
P/V Ratio
B.E. sales
Profit when sales are Rs. 1,00,000
Sales required to earn a profit of Rs. 20,000
Margin of safety in II period.
Period Sales
Rs.
Profit
Rs.
I 1,20,000 9,000
II 1,40,000 13,000
12. Prepare a flexible budget for overheads on the basis of
the following data and ascertain overhead rates at
60% and 70% capacity.
At 60% capacity
Rs.
Variable overheads
Indirect material 6,000
Indirect labour 18,000
Semi-variable overheads
Electricity fixed 60% variable) 30,000
Repairs fixed 20% variable) 3,000
Fixed overheads
Depreciation 16,500
Insurance 4,500
Salaries 15,000
Total overheads 93,000
Estimated direct labour hours 1,86,000
13. Explain the objectives of financial management.
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14. The X ltd. is considering the purchase of a new machine.
Two alternative machines and have been suggested,
each having an initial cost or Rs. 4,00,000. Earnings after
taxation are expected and present value at 10% as
follows.
Year Cash inflows Present value at 10%
Machine A Machine B
1 40,000 1,20,000 0.91
2 1,20,000 1,60,000 0.83
3 1,60,000 2,00,000 0.75
4 2,40,000 1,20,000 0.68
5 1,60,000 80,000 0.62
Evaluate and choose one of the machines under net
present value method.
15. What is break even analysis? Enumerate its merits and
demerits.