MB-103

Sl.No. : Total No. of Pages : 7

First Semester M.B.A. Degree Examination, March 2020

Course - 3 : ACCOUNTING FOR MANAGERS

Time : 3 Hours Max. Marks : 80

Instruction : Answer All Sections.

SECTION - A

Q1) Answer any five sub-questions. Each question carry 3 marks. [5 × 3 = 15]

a) What do you mean by single entry and double entry system of book keeping?

b) Sachin started business with cash H5,00,000 and Machinery H2,00,000. (Pass
Journal Entry)

c) State three differences between the Journal and Ledger.

d) Mention the objectives of Trading, Profit and Loss account and Balance
Sheet.

e) What is “operating income”? Give an example.

f) List out the uses of accounting information.

g) State three differences between fund flow statement and cash flow statement.

SECTION - B

Answer any four questions. Each question carry 5 marks. [4 × 5 = 20]

Q2) Give examples of Financial expenses, Administrative expenses and selling and
distribution expenses.

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Q3) Prepare trading account in the books of Raju from the following particulars for the
period ending 31-3-2018

Opening stock 20,000

Closing stock 21,000

Return Inwards 300

Purchases 45,200

Sales 60,300

Wages 8,000

Return Outwards 200

Q4) What are the different methods used for the analysis and interpretation of financial
statements?

Q5) Calculate factory cost from the following information.

Materials consumed 48,000
Productive wages 16,000
Direct expenses 4,000
Consumable stores 1,600
Oil grease / Lubricating 400
Salary of a factory manager 4,800
Unproductive wages 800
Factory rent 1,600
Repair and Depreciation on machine 480

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Q6) What is meant by ratio analysis? Discuss its limitation and objectives.

Q7) From the following profit and loss account, you are required to prepare / compute
cash from operations.

Profit and Loss Account for the year ending 31-3-2018

Amount Amount
H H
To salaries 5,000 By Gross profit 25,000

" Rent 1,000 " Profit on sale of land 5,000

" Depreciation 2,000 " Income tax refund 3,000

" Loss on sale of plant 1,000

" Goodwill written off 4,000

" Proposed dividend 5,000

" Provision for taxation 5,000

" Net profit 10,000

33,000 33,000

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SECTION - C

Answer any three questions. Each question carries 10 marks. [3 × 10 = 30]

Q8) Explain the various accounting concepts and conventions.

Q9) The following balances were extracted from the books of Sri Murthy, a Trader as
at 31-3-2018.
Debit Credit
Capital of Sri Murthy 19,400
Purchase and sales 41,400 55,140
Trade debtors and creditors 7,250 3,860
Stock on 1-4-2017 4,120
Purchase returns 100
Sales returns 120 -
Balances at bank 3,920 -
Drawing 4,600 -
Motor Van expenses 510 -
Motor Van 6,250 -
Rent and rates 750 -
Salaries 8,120 -
Reserve for doubtful debts - 250
Bad debts 230 -
General expenses 1,120 -
Discount allowed 1,050 -
Discount received - 930
Insurance 240 -
79,680 79,680

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Adjustments:

a) Salaries and rent accrued but not paid H820 and H150 respectively.

b) Insurance paid in advance H40.

c) Maintain the reserve for doubtful debts at H300.

d) Depreciation on Motor Van to be made at 10%.

e) The stock in trade 31st March 2018 was value of H5,040.

You are required to prepare a trading, profit & loss account for the year ending 31st
Match 2018 and balance sheet as on that date.

Q10)Discuss in detail process of convergence of Indian Accounting Standards with

IFRS in India.

Q11)The following are the balance sheets of DCC Ltd. as on 31-March 2018 and 2019.
Liabilities 31-3-2018 31-3-2019 Assets 31-3-2018 31-3-2019

Share capital 2,30,000 3,00,000 Land & Building 1,50,000 1,50,000

General reserve 1,00,000 1,20,000 Plant & Machinery 1,00,000 60,000

Profit & loss A/c 80,000 1,00,000 Furniture 40,000 40,000

Creditors 1,00,000 70,000 Investments 60,000 80,000

Provision for
Taxation 90,000 30,000 Stock 1,20,000 2,00,000

Loan - 60,000 Debtors 80,000 60,000

Cash 50,000 90,000

6,00,000 6,80,000 6,00,000 6,80,000

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Additional Information:
a) Provision for taxation made during the year H15,000.
b) Investment costing H15,000 were sold during the year for H18,000.
c) During the year plant & machinery costing H10,000 was sold for H12,500.
The profit was included in the profit and loss account.
d) Dividend paid during the year amounted to H30,000.

Prepare a schedule of changes in working capital and a statement of sources and

application of funds for the year ended 31-3-2019.

Q12)Describe the different methods of valuation of human resource.

SECTION - D
(Compulsory)
[1 × 15 = 15]

Q13)The summarised Balance Sheet of MMP Traders Ltd. for the year ended 31-3-2018
is given below:

Liabilities Rs. Assets Rs.

Equity share capital 1,40,000 Fixed Assets 2,10,000

Reserve & Surplus 45,000 Less : Depreciation 25,000 1,85,000

Profit & loss A/c 20,000 Current Assets:

Provision for taxation 10,000 Stock 25,000

Sundry creditors 40,000 Debtors 30,000

Cash 15,000 70,000

2,55,000 2,55,000

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The following further particulars are also given for the period.
Sales H1,20,000

Earnings Before Interest & Tax (EBIT) H30,000

Net Profit After Tax (PAT) H20,000

Calculate the following for the company and explain the significance of each in one
or two sentences:

a) Current ratio.

b) Liquid / Quick ratio.

c) Profitability ratio.

d) Net profit ratio.

e) Debt equity ratio.

f) Debtors turn over.

g) Stock turn over.

h) Return on equity.

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