Sunday, 2 October 2011

MB0041 - Financial & Management Accounting


MBA- I semester
MB0041- Financial & Management Accounting – 4 Credits
Book ID- ( B1130 )
Assignment Set 1- (60 Marks)
=========================
Note: Answer all the questions.
1. Accounting Principles are the rules based on which accounting takes place and these rules are universally accepted. Explain the principles of materiality and principles of full disclosure. Explain why these two principles are contradicting each other. Your answer should be substantiated with relevant examples. (10 Marks)


SMU Assignment 2011

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2. Journalize the below transactions, prepare relevant ledger accounts and finally trial balance. . ( 6+6+3 = 15 Marks)
M/s Ventak Enterprise Pvt Ltd.
01.01.2009  Started business with cash Rs. 2,00,000 Goods Rs. 1,00,000 Furniture Rs. 50,000
01.01.2009  Opened Current Account with Rs. 1,00,000
02.01.2009  Placed an order with Ritik for the supply of goods of the list price of Rs. 1, 00, 00.In this connection, we paid 9% of the list price as an advance by cheque.
03.01.2009 Ritik supplied goods of the list price of Rs. 1, 00,000 less 12% trade discount. Packing and delivery charges Rs. 1,000.
04.01.2009  Purchased goods from Murali of the list price of Rs. 1,00,000 less 12% trade discount and paid him by cheque under a cash discount of 5%
05.01.2009  Received an order from Shyam for supply of goods of the list price of Rs. 1, 00,000 with an advance of 10% of list price.
06.01.2009  Supplied the above goods at 10% trade discount. Packing and delivery charges Rs. 1000.
07.01.2009  Goods costing Rs. 80,000 sold to Mr X at a profit of 20% on sales less 10% trade discount and 2% cash discount
08.01.2009  Goods (cost Rs. 3,000, Sales Price Rs. 4,000) taken away by the proprietor for his personal use.
09.01.2009  Shyam became insolvent and paid 80 paise in a rupee in full and final settlement
10.01.2009
Paid Ritik 80% on account.
11.01.2009  Goods (Cost Rs. 3,000 , Sales Price Rs. 4,000) stolen
12.01.2009  Paid Life Insurance Premium Rs. 1,000.
13.01.2009  Cash embezzled by an employee Rs. 1,000.

3. Explain any two types of errors that are disclosed by trial balance with examples and rectification entry.
Note - Avoid giving examples given in the self learning material. (10 marks)
Nov 2010

4. Let us assume you have been recently appointed as Management Accountant of a small but upcoming firm. Your immediate supervisor has asked you to prepare certain financial ratios from the balance sheet of one of their clients M/s Vinod Enterprise.
Liabilities
Amount
Assets
Amount
Equity Share Capital 50000  Fixed assets  87500  8% Pref Share Capital
10000  Investments  25000
Reserve Fund
40000
Stock
30000
6% Debentures
20000
Sundry Debtors
13500
Sundry Creditors
30000
Bank Balance
7000
P & L account
Year 2000 - 1000
2001 - 20000
21000
Preliminary expenses
8000
Total
171000
Total
171000
The director intent to transfer a sum of Rs.5000 out of the current year’s profit to provision for tax. The financial ratios needed are:
a. Return on capital employed
b. Current ratio
c. Fixed assets to networth
d. Debt - Equity ratio
e. Return on owner’s capital. (10 Marks)

5. A friend of you has approached to help him out in setting his books of accounts in order. Unfortunately he is struck with difference in trial balance. Help him in redrafting the trial balance. (5 Marks)
Sl.no
Particulars
Dr
Cr
1
Stock on 31st Dec,2008
1,92,100
2
Capital
13,450
3
Cash in hand
1,400
4
Bank Overdraft
9,320
5
Sales
2,36,400
6
Purchases
106,400
7
Returns inward
13,400
8
Returns outward
2,960
9
Carriage outward
2,360
10
Carriage inward
14,260
11
Salaries
9,600
12
Wages
3,660
13
Sundry debtors
16,300
14
Sundry creditors
37,360
15
Stock on 1st Jan 2006
94,120
16
Land and building
15,000
17
Plant and machinery
20,900
18
Trade expenses
2,090
3,95,540
3,95,540
6. Explain the accounting treatment of bad debt and provision for doubtful debts with suitable example. (10 Marks)


MBA- I semester
MB0041- Financial & Management Accounting – 4 Credits
Book ID- ( B1130 )
Assignment Set 2- (60 Marks)
Note: Answer all the questions.
=============================
1. The Balanced Score Card is a framework for integrating measures derived from strategy. Take an Indian company which has adopted balance score card successfully and explain how it had derived benefits out of this framework.(10 Marks)
2. What is DuPont analysis? Explain all the ratios involved in this analysis. Your answer should be supported with the chart. (10 Marks)
3. Prepare Funds Flow statement from the following balance sheets and additional information
Liabilities
1998
1999
Assets
1998
1999
Eq Share capital
7,50,000
9,00,000
Good will
20,000
15,000
13% debentures
2,50,000
2,00,000
Plant & Machinery
3,50,000
4,50,000
Profit and loss a/c
40,000
50,000
Land & building
6,50,000
6,59,000
General reserve
40,000
50,000
Investments
40,000
1,48,000
Creditors
50,000
60,000
Debtors
50,000
30,000
Bills payable
30,000
20,000
Stock
80,000
90,000
Provision for tax
50,000
60,000
Bills receivable
70,000
50,000
Prov for dep on land and building
1,00,000
1,40,000
Bank
40,000
30,000
Total
Preliminary expenses
10,000
8,000
13,10,000
14,80,000
total
13,10,000
14,80,000
Additional information
1. Provision for depreciation on P&M was RS40,000 o 31st March 1998 and Rs.45,000 on 31st March 1999
2. Machinery costing Rs.36000 (acc dep Rs12,000) was sold for Rs.20,000
3. Investment costing Rs.30000 were sold at a profit of 20% on cost
4. Tax of Rs.30000 were paid (20 marks)
4. The standard cost of a certain chemical mixture is:
35% Material A at Rs.25 per kg
65% Material B at Rs.36 per kg
A standard loss of 5% is expected in production
Nov 2010
During a period there is used:
125kg of Material A at Rs.27 per kg and
275kg of Material B at Rs.34 per kg
The actual output was 365 kg
Calculate
a. Material cost variance
b. Material price variance
c. Material mix variance
d. Material yield variance
Hint: Use net standard output (deduct the loss) (20 Marks)

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