wooauljuowon Maa /:sdny, https://www.uomonline.com 30629 vem ME-3152 SLNo.I Total No. of Pages : 11 VI Semester B.B.M./B.B.A. Examination, September 2020 (Scheme : NRS 2014) FINANCIAL MANAGEMENT - III Working Capital Management Time : 3 Hours Max. Marks : 80 Instruction : Answer all Parts. eR geririeris wvgo4. PART-A wen - 2 Answer any three questions. 15 marks each. cimAMmade shew gyner wgyor. yoo 15 woureh. Q1) Define working capital? Explain the various factors affecting the working capital policy. wo wowaevaad, s2,23922 wd, wowany AeSabmy, AGFODS DH} wounva, BOA, Q2) Skytop Ltd. has annual sales of 10,000 units @ Rs. 150 per unit. The variable cost is Rs. 100 per unit and fixed cost amounted to Rs. 1,50,000. The present credit period is one month. The company is considering a proposal to increase credit period to 2 or 3 months with the following estimates. Particulars Existing Proposed A |B Credit period (month) 1 2 | 3 Increase in sales (%) - 1s | 30 Bad debts (%) 1 3 | 5 PTO. https://www.uomonline.com woo surfuowon Mam /:sdyyhttps://www.uomonline.com 30629 M-3152 There will be increase in fixed cost by Rs. 25,000 on account of sales beyond 25 percent of present level. The company expects a pre-tax returns of 20 percent. Which credit policy should the company adopt? Hy sR somdod sears aoe 10,000 chaderrvanad, Bs oheners 8S Ge. 150 EN, wears} def ZS ohne do. 100 whch, ao sey GA. 150,000. HAE WOT UAH cord Sorisd. dosidodn Os vaHobm, 2 wx 3 Soren sums amdclecdr sh svdod POmovsiah, SOTRBAT. dao BAe, Receives A B mos exo (Sore) 1 2 3 ARTBdYS Bryy (Be.) - (15 30 80m) moO (Se.) 1 3 5 Bmoetia) de, 25408 mogoindd AC slugs) de. 25,000 aesgross AOceotod. sowdomy dom shows smobsay, de. 20 day, aOegxdwC. somos otras mod Acsodad, eadXoRsTeed. Q3) The following are the Balance sheet of Chethan Ltd. as on 31 March 2018 and 2019. Liabilities 2018 2019 | Assets 2018 2019 (Rs.) (Rs.) (Rs.) (Rs.) Equity share capital 1,50,000 | 2,00,000 | Goodwill 80.000 | 45,000 1,50,000 | 90,000 60,000 | 70,000 45,000 | 80.000 48,000 | 40,000 40,000 | 60,000 50,000 | 60,000 67,000 | 30,000 70,000 Preference share capital General reserve Profit & Loss A/c Land & building} 2,00,000 |2,30,000 Plant & Machinery | 1,40,000 |1,30,000 Stock 30,000 | 40,000 Sundry debtors 90,000 |1,00,000 Cash 72,000 |1,15,000 Sundry creditors Bank overdraft Discount on issue of shares 48,000 | 40,000 Proposed dividend Provision for tax Depreciation fund 7,00,000 6,60,000 2 https://www.uomonline.com mown MMA /:sdyyhttps://www.uomonline.com 30629 M-3152 Additional information : 1) During the year 2019, a part of machinery was sold for Rs. 75,000, The original cost of which was Rs. 1,00,000 and accumulated depreciation was Rs. 30,000. 2) The building was depreciated by Rs. 30,000 in 2019. 3) A provision was made Rs. 13,000 for income tax in 2019. 4) An interim dividend of Rs. 50,000 was paid during the year. Prepare: a) Schedule of changes in working capital and b) Funds flow statement. wes FOMACH SBS Tries 31 Aoewir 218 sy wwe 20198 oF z Setodoss. 3 € = 2019 eae 2018 | 2019 2 oe § as. ws. | de, 2 2,00,000 | somos 0,000 | 45.000 g 90,000 | ens & #38 2,00,000 | 2,30,000 2 g s 70,000 | bog, & xgi0 1,40,000 | 1,30.000 g 80,000 | xe coxa 30,000 | 40,000 40,000 | assetrvvo 90,000 } 1,00,000 60,000 | sic 72,000 | 1,15,000 60,000 | seco atoxtaens Sovran corte 30,000 | doses 48,000 | 40,000 Rates RO 70,000 7.00.00 6,60.000 } 7,00,000 3. https://www.uomonline.comwooauljuowon Maa /:sdny, https://www.uomonline.com 30629 M-3152 Bewsyso Bwbs:— 1) 201902, earive chosmad, an. 75,0008, BBevAd. eds vo vd Gx. 1,00,000, amsdAs ABze de. 30,000 2) 20198@ Byard BP, Ge. 30,000 om, ABE SAG. 3) 201908 ce. 13,000 Sad, smob Son mBsNen dnesPoad. 4) Dywoes eummos & BairBE de. 50,000 samennd. soseoa: 2) adearbs wowomaey ct 2) AGod deme sty Q4) From the following budgeted data forecast cash position at the end of April, May, June 2020 Month Sales [Purchases | Wages [Production] _ Office | Selling and 2020 (Rs.) (Rs.) | (Rs.) | overhead | overhead | distribution (Rs.)| Rs.) | overhead (Rs.) February |6,00,000 | 3,60,000 | 50,000 50,000 | 35,000 25,000 March —|7,00,000| 4,00,000 | 60,000 25,000] 40,000 25,000 April 7,40,000 | 5,00,000 | 45,000 40,000} 42,000 15,000 May 8,00,000 | 5,60,000 | 54,000 35,000 | 45,000 16,000 June 8,40,000 | 6,00,000 | 34,000 40,000 |, 30,000 17,000 Additional information : - a) Cash in hand expected on 1-4-2020 Rs. 1,20,000. b) Sales : 20% cash sales, balance credit sales realised equally in two subsequent months. c) Purchases are paid in the month following the month of supply. d) Wages : 75% of wages to be paid in next month. e) Other expenses paid after one month. “4. https://www.uomonline.com woo surfuowon Mam /:sdyyhttps://www.uomonline.com 30629 M-3152 f) Rent: Rs. 8,000 per month, to be paid in advance for 3 months in the month of April. g) _ Income form investment : Rs. 1,00,000 received quarterly April, July ete. h) Income tax : First install ment of advance tax Rs. 1,10,000 due on or before 15" June. Show working notes wherever necessary. Si S¥¥0d oloewaD Gos wOUNVoD 2020 He MOS OA, se moe wert Sone Sich Swaocie Tiyodad, Zoswor, sored ‘soe DOO BOD WAG sso sooTees 2020 shed | beds | abel (Ox.) (Ge.) | (Oe) |* (62) (O2.) (G2.) Bawo 6,00,000 | 360,000 | 50,000 50,000 35,000 25,000 Reerr 7,00,000 | 4,00,000 | 60,000 25,000 40,000 25,000 7,40,000 | 5,00,000 | 45,000 40,000 42,000 15,000 abe 8,00,000 | 5,60,000 | 54,000 35,000 45,000 16,000 BAT 8,40,000 | 6,00,000 | 34,000 40,000 30,000 17,000 aad siete ©) 01-04-20208, $0b9 adds sricd de. 1,20,000 2) stooets; Be. 20% Srich soos, ved WAS awootsgy Andaoossach BNOOS QV Sonvg SAodowwrog7. A) DOC; Fowoommoddon sow ScHMBD SvooHs Sons masters. . 75 Osh, SHS Sores mAsxemmayr a) aad Segyies wom Song Joys mBsseerbyymd OT )RaN; D2 8,000 Sore em@nroba, 3 Sore Boowsaen BITTE old 2) Beaoo sheds vovod; de. 1,00,000 Bm, Dow sorienash, SOSS HAS, wg, BRO sore xdoimae. aw )ysmon Fon; Aedo soss swons 6A ce. 110,000 Bm, IS menthos sod sia men’ 15 doc) mAs. SAZHOS 84 Gord wardrivay, Zocoa. -5- : https://www.uomonline.com uotuon MMAy/:sdyywooauljuowon Maa /:sdny, https://www.uomonline.com 30629 M-3152 Q5) Estimate the working capital requirement of ‘Chandan Ltd. for the year 2020 from the following information. Assume that the production and sales occur evenily throughout the year. Particulars perunit : (Rs.) Raw materials 60 Direct wages 30 Manufacturing and administration overhead 16 Selling overhead 7 Total cost : 13 Profit 17 Selling price 130 Other i a) Production and sales 1,00,000 units. b) Raw materials are in stock on an average 2 months. c) Materials are in process one month. 4) Finished goods are in store an average 24 month. ©) Credit allowed by suppliers three months. f) Time lag in payment of wages one month. g) Time lag in payment of overheads half'a month. h) Credit allowed to customers two months, }) 25% of the output is sold for cash. , j) Cash in hand expected to be Rs. 50,000. 6- . https://www.uomonline.com woo surfuowon Mam /:sdyyhttps://www.uomonline.com 30629 M-3152 Bi SPECS HRSco0d 2l6Se Sarg “oda” Odniats ww wowmed SHESCHA, SOCRAA, ATS Thay ThoTels asi Nae AckeMosOsENDS. Be ono: : 13 130 Hoon MMa//:sdyy Tee? 1,00,000 obwnerrice Aris ceABATOS Te Teohodoss @) AGamrivs 2% Sonv memAsgs DS LTH 2 Sorts . 25 gan anon swoewoerbg cS Te. 50,000 7. https://www.uomonline.comhttps://www.uomonline.com 30629 M-3152 PART -B wen - 2 ‘Answer any two questions. 10 marks each. oimajtmaice 2 Byer mgDr. goo 10 wosriss. Q6) Explain the motives of holding cash. andar, GOES enesrivad, DBOA. Q7) Monthly usage of materials 250 units. Cost of placing an order Rs. 30 b) No. of orders to be placed = Cost of material Rs. 5 per unit = 2 Carrying cost 5% of inventory value z 2 Find out : = é a) EOQ 3 2 g c) Total ordering cost 3g d) Total carrying cost 5 & e) Total inventory cost g 3 mabenny stead wvsioseen 250 odentetrive ees Sof ZS ockevs de. 30 matieh, dof de. 5 a2 oben BIDS ses Se. SOx, maivmAcd sido shed sows. a) Mexyob Bes TY, Q) AQrwwmed vdesne xsd, A) ath, oles Seg, @) wy, madA mmads Bog ) wt, comAd aes, -8- https://www.uomonline.comwooauljuowon Maa /:sdny, https://www.uomonline.com 30629 M-3152 Q8) From the following details draw a plan of ABC selective control. + No. of units Cost per unit (Rs.) 14,000 5.00 48,000 3.00 30,000 10.00 1,200 22.00 76,000 1.50 80,000 0.50 1,20,000 0.20 6,000 3.50 600 8.00 58,000 0.40 23,000 7.10 8,200 6.20 & S¢t0d ASUNGes wow ‘ * odnemBionay, Besa, Sroreo oaseaNTTIee 33 obeaers dd (do) 1 14,000 5.00 2 48,000 3.00 3 30,000 10.00 4 1.200 22.00 5 76,000 150 6 80,000 0.50 7 1.20,000 0.20 8 6,000 3.50 9 600 8.00 0 58,000 0.40 u 23,000 710 2 8,200 6.20 -9- https://www.uomonline.com woo surfuowon Mam /:sdyyhttps://www.uomonline.com 30629 31° March 2018. M-3152 09) Following is the summary of cash account of Vijay Ltd. for the year ended Receipts Rs. |Payments Rs. Balance 1-4-2017 50,000|Payment to creditors | 20,00,000 Issue of equity shares 3,00,000 | Purchase of plant and Receipts from debtors _|28,00,000 machinery 2,00,000] Sale of plant and machinery | 1,00,000 | Operating expenses 2,00,000' Wages and salaries 1,00,000 Income tax 2,50,000 Dividend 50,000 Redemption of Debentures | 3,00,000 Balance 31-3-2018 1,50,000 32,50,000 32,50,000 Prepare cash flow statement t in accordance with AS-3 using direct method. wos Odoila’s Aric Gyo movowes 31~3-2018§ soxraowos seNAOSS. 3x00 eS de. 1-4-20173 m8 50,000 |garen seta, 20,00,000 Bigs Beco Bobricd 3,00,000 Jonosassitcrony abeirivod sted 28,00,000 |00e0 2,00,000 obosgesitdronty sweets | 1,00,000|aarars debris 2,00,000 B2O shey Aowd 1,00,000) semob sor 2,50,000) eaer08 50,000 PRETENY sibwwss 3,00,000 31-3-2018 3 we 1,50,000) 32,50,000 32,50,000 Brich dom Koda, AS-3Tmed (Seo BAS) FowROA. -10- https://www.uomonline.com mown MMA /:sdyyhttps://www.uomonline.com 30629 M-3152 PART -C gen - 4h Answer all questions. 3 marks each. asp Borer wyor. sev 3 wove. Q10)State any three difference between cash flow statement and fund flow statement. Shch wos mene Senn aO wos wine abs sew RsaArivay, SOR. QI1)Write a note on cash budget. Brich stosomeen nity, arf ied adoro. Q12)What is Ageing schedule of receivables? wUdems mowod Sob~s wy, aowdesd? Q13)Write a note on operating cycle. “dem wed, OAK. mown MMA /:sdyy QIHExplain 3 Net 45. 3 eo 45 DBOA, -li- https://www.uomonline.com