First Model Test Paper Part – B

Time: 40 Minutes Accountancy M.M. 20

1. State whether ‘Conversion of debentures into Equity Shares by a Financing Company will result into inflow,
outflow or no flow of cash?
2. State how ‘Window Dressing’ is the limitation of Financial Statement Analysis.
3. Assuming that the Current Ratio is 2:1, state giving reason whether the ratio will improve, decline or will have no
change in case a Bill Receivable is dishonored.
4. Give major heads and sub heads under which following items will be disclosed in the Balance Sheet as per
Revised Schedule VI of the Companies Act, 1956:
(a) Proposed Dividend (d) Live Stock
(b) Premium on Redemption of Debentures (e) Bank Overdraft
(c) Licenses and Franchise (f) Outstanding Expenses
5. From the following information, prepare Comparative Statement of Profit & Loss:
Particulars 2014 2013
Revenue from Operations 500% of other income 500% of other income
Other income 40,000 50,000
Cost of Material Consumed 60% of Revenue from operations 50% of Revenue from operations
Other Expenses 2 ½ % of Cost of Material Consumed 2 ½ % of Cost of Material Consumed
Tax 30% 30%
6. Following are the details regarding Inventory Turnover Ratio of ABC ltd.
Particulars Opening Closing
Raw Materials 60,000 80,000
WIP 20,000 25,000
Finished Goods 40,000 65,000
Purchases during the year were 6,50,000
What would happen to the Inventory Turnover Ratio in the following cases?
(a) Goods worth Rs. 40,000 were sold for Rs. 50,000
(b) Goods purchased worth Rs. 50,000
(c) Goods were distributed for charity purposes Rs. 20,000
(d) Goods withdrawn by proprietor Rs. 15,000
7. From the following information prepare Cash Flow Statement: (6)
Particulars Note No. 2013 2014
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share Capital 9,00,000 9,00,000
(b) Reserves and Surplus
General Reserve 6,00,000 6,20,000
Statement of Profit & Loss 1,12,000 1,36,000
2. Non-current Liabilities
Long-term Borrowings :
Mortgage Loan --- 5,40,000
3. Current Liabilities
(a) Trade Payables (Creditors) 3,36,000 2,68,000
(b) Short Term Provision : 1,50,000 20,000
Tax Provision 20,98,000 24,84,000
Total
II Assets
1. Non-current Assets
(a) Fixed Assets: 8,00,000
(i) Tangible Assets : Machinery 6,40,000
 (b) Non-current Investments 1,00,000 1,20,000
2. Current Assets
(a) Inventories 4,80,000 4,20,000
(b) Trade Receivables (Debtors) 4,20,000 9,10,000
(c) Cash and Cash Equivalents 2,98,000 3,94,000
Total 20,98,000 24,84,000

Additional Information:
(a) Investments costing Rs.16,000 were sold during the year 2013-14 for Rs.17,000.
(b) Provision for Tax made during the year Rs.18,000.
(c) Dividend paid during the year Rs.80,000.
(d) During the year a part of fixed assets costing Rs.20,000 sold for Rs.24,000. The profit was included in the
Statement of Profit & Loss.