oa PURBANCHAL UNIVERSITY 2013 Master of Business Administration/First Semester/Final (New Course} Time: 03:00 hrs. Pull Marks: 60/Pass Marks: 24 Financial Accounting Candidates are required to give their answers in their own words as far as practicable, The figures in margin indicate full marks. Group A: Group A: (Case Study) Compulsory Question. 1x15=15 1. Shown below, in alphabetical order, are items taken from the records of XYZ’s financial statements for the year ending December 31” 2012: Rs Rs [Account payable 3800|Long term debt 16100) \ccount receivable - | 6900 het sales - | 77600 EE Depreciation property 5700) a siing eae 700 apital in excess of par 1050 Notes payable 3200 ‘ash and cash equivalent 1360 [Other assets (long term) | 16660 (Cash dividends 3750 Other current assets 2160 (on stocks 4200 [Other current liabilities | 4100 ost of goods sola + 32800 bother incomes 1690 (Current maturity of long term devel] 4000 er liabilities (long term) | 8200 income tax (expenses) 2790 Property 28800 insurance expenses 1800 Retained earnings 13860 [interest expenses 3645 Selling & adm. Expenses | 25140 inventories 1500 etal Ee oea0 Additional information: (a) Accrued selling and distribution expenses Rs 1700, (b) Unexpired insurance Rs 600. {c) Other income receivable Rs 300. (d) Depreciation on property @ 10%p.a Contd. ...(2) Required: (i) Multiple step income statement with statement of retained earnings for the year ending December 31, 2012 (ii) Balance sheet as on December 31, 2012 Group B: (Long Answer Type Questions) Answer TWO questions. 2x10=20 2. financial information of a company for two year is given below: Balance Sheet for year 2009 and 2010 Liabilities 2009 | 2010 Assets 2009 | 2010 [Equity share capital | 1000000] 1500000 [Plant & machinery | 770000|1540000 [10% debenture 100000 150000 Investment 300000] 200000 \Account payable 200000] 280000 [inventory | 150000] 200000 (ore wages 10000} 20000 |Account receivable } 200000) 150000 Provision for tax 80000} 60000)Prepaid expenses | 30000} 10000 P/LA/e 110000] 190000 Cash at Bank 50000] 100000 1500000} 2200000 1500000 }2200000_ Income statement for 2010 Particulars Amount Amount Sales 1000000 Less: Cost of goods sold . 600000 Gross margin 400000 Less: operation Expenses Operating expenses 100000 | Depreciation on plant and machinery 100000 Loss on sale of plant (book value Rs. 40000) 10000 Provision for tax 80000 | 290000 | Net income 110000 ‘Add: profit on sale of investment 70000 Total net income 180000 Required: Cash Flow statement for year 2010 Contd. ... 1 (3) 3. Comment on the liquidity position of ABC Co. Ltd after construction of its Balance Sheet based on the following information: \Shareholder's equity IRs. 500000 [Gross profit (20% of sales) = iRs. 600000 fereait sales to total sales ratio {80% of total sales frotaa assets turnover ratio 3 times : ‘Stock turnover ratio [8 times laverage collection period (360 days in year) 18 days {Current Ratio . 16:1 fLong term debt to equity 0% 4. “Accounting is a continuous process” explain with reference of accounting cycle. Explain the major financial statements. Group C: (Short Answer Type Questions Answer FIVE questions. Q. (10) is Compulsory. 4x5+(5x1)=25 5. What do you understand by “Annual Report” of a company? Briefly explain the major elements of an Annual Report. 6. The opening and closing balance of current assets and current liabilities are as under: IstJan | 31 Dec Inventories 200000 100000. Prepaid expenses 8000 12000 ‘Accounts receivable 192000 148000 Cash at bank 60000 100000 Bank overdraft — 40000 Accounts payable 160000 100000 ‘Outstanding expenses 20000 10000 Provision for taxation 60000 80000 (i) Sales for the year was Rs 800,000 and cost of goods sold was Rs 500,000. Operating expense incurred for the year were Rs 100,000. (ii) Tax paid for the year was Rs 60,000. (iii) Depreciation of Rs.25000 has been included in operating expenses Required: Cash from operating activity using direct method Contd. ...9. (5) OR Following figures were extracted from the book of a company: Current liabilities Rs 25,000 Net profit Rs 255,000 Quick ratio 0.55:1 Total assets Rs 20,00,000 Net profit margin 15% Non-liquid current assets Rs 25,000 Required: (a) Quick assets (b) Total assets turnover ratio (c) Total sales Briefly explain about management accounting and human resource accounting. (d) Current ratio 10. Answer in one sentence. {a) Write the adjustment entry of outstanding expenses {b) List the statement of financial report (c) Give one/ one example for capital expenditure and revenue ‘expenditure ) Write the debit credit rule for nominal account (e) State the structure of accounting equation. Y = (4) The following information have been extracted from trial balance of a company [ PePaeuiars Debit (Rs.)_] Credit (Rs) | Equity share capital 500000 Interim Dividend 6000 Tax paid for last year 15000 : Provision for tax for last year 20000 Sinking fund 15000 General reserve 20000 Profit and loss appropriation 25000 Net profit for the year was Rs 55,000. The BOD has decided the Proposed dividend Rs 25,000 transfer to general reserve Rs 10,000 and Rs 4,000 to sinking fund. Requiredy— (i) Statement of Retained Earnings (ii) Net worth Prepare a common size ‘balance sheet for a company for 2011 and 2012 and comment on the changes from 2011 to 2012. Use the following comparative balance Sheet presented by the company as at December last. Shareholder's fund: 2012 2011 Share capital 137000 137000 Reserve and surplus 76000 35000 Liabilities Secured loans 50000 | 116000 Unsecured loans 298000 103000 | Current liabilities & provisions 149000 39000 Total equity and liabilities 710000 430000 Assets: Fixed assets (net) 284000 215000 Investments 3000 2000 Inventories 213000 108000 Debtors (net) 165000 70000 Cash 45000 35000 Total assets Ee 710000 430000. Contd. ...