[This question paper contains 12 printed pages.] Your Roll No....... Sr. No. of Question Paper: 1564 E Unique Paper Code : 1-429801104 — (SOL) Name of the Paper : MBAFT - 6104 : ACCOUNTING. FOR MANAGERS Name of the Course : Master of Business Administration (MBA) | Semester : I (Examination 2023) Duration : 3 Hours Maximum Marks-:.70 Instructions for Candidates \ 1. Write your Roll No. on the top immediately on receipt of this question paper. 2. This paper consists of 7 questions. Question no. 1 is mandatory, A 3. Students need to attempt 4 questions out of question no. 2-7. Balance Sheet of JJ Ltd. and income statement for the period 2022-23 are as follows: Per: OF1564 2 Balance Sheet as at March 31 Assets Non-current assets Property, plant and equipment Deduct Accumulated depreciation Property, plant and equipment, net Current assets Inventories Financial assets Investments Trade receivables (net of allowance for credit losses 8,000; 12,000) Cash and cash equivalents er current assets: paid expenses Equity and Liabilities 2023 ®@ 720,000 362,000 358,000 151,000 18,000 29,000 12,000 6,000 574,000 2022 @) 540,000 305,000 235,000 119,000 66,000 166,000 69,000 2,000 657,0001564 3 i Loe | Equity Equity share capital 155,000 85,000 Other equity 102,000 120,000 Liabilities Non-current liabilities i Financial liabilities | Borrowings 87,000 57,000 | Othiernon-current liabilities 191,000 191,000 [ Current liabilities Financial liabilities Trade payables 30,000 187,000 Current tax liabilities 9,000 17,000 Total equity and liabilities 574,000. 657,000 Statement of Profit and Loss For the year ended March 31, 2023 ®@ 570,000 est income 2,000 P.T.O.1564 Gain on sale of investments Total income Expenses Cost of goods sold Depreciation expense Selling and administrative expenses Finance costs Loss on sale of equipment Total expenses Profit before tax Tax expense Profit for the period Additional information : 7,000 579,000 445,000 89,000 46,000 14,000 3,000 597,000 (18,000) 0 (18,000) () Purchased equipment for cash, % 150,000. Gi) Sold equipment for cash, % 10,000 (cost, % 45,000; accumulated depreciation, % 32,000). ii) Purchased investments for cash, % 30,000.1564 5 (iv) Sold investments for cash, % 85,000 (cost, % 78,000). (v) Purchased equipment in exchange for debentures, ~ 75,000. (vi). Issued shares for cash, = 50,000. (vii) Converted debentures into equity shares, = 20,000. (viii) Redeemed debentures, % 25,000. (ix) Wrote off % 14,000 of trade receivables and recognized bad debt expense of % 10,000, included in selling and administrative expenses. Required Prepare the statement of cash flows using the indirect method. (20) 2. The machinery was purchased for %.1,60,000 on 16-6-2023. The company took delivery on 27-06-2023 incurring & 2,500 for transportation. The machine was installed on 15-07-2023 spending % 2,000 for wages P.T.O.1564 6 and % 1,000 and consultancy fees. Trial run was conducted on 15-11- 2023 spending % 2,500. The machine was put to use on 1-1-2024. Useful life of the machine was expected to be 5 years and scrap value at the end was expected to be & 12,000. The firm follows a straight line method of depreciation. Show Machinery Account and Provision for Depreciation Account assuming that machine realized 13,000 at the end of 5 years. The accounts are closed on 31st March each year. (12.5) 3. (a) A company started its business on Ist January, 2019. It purchased and used raw material during the year 2019 as started below: January 10 800 Kgs @ % 62 per Kg. February 28 1200 kgs @ % 57 per Kg. March 10 Issued 1,000 kgs. March 26 Issued 500 kgs May 20 900 kgs @ % 65 per Ke June 28 Issued 600 kgs.1564 7 Calculate value of closing stock of raw material on June 30 according to (i) Last in first out basis. Gi) Weighted average basis, using perpetual inventory system. (8) (b) Sangeeta Company entered into the following transactions. Classify each as (i) operating activity, (ii) investing activity, (iii) financing activity, (iv) non-cash activity, or (v) cash management activity. (a) Purchased a 90-day Treasury bill. (b) Received interest on deposits. (c) Redeemed debentures. (d) Paid dividend. (e) Sold manufacturing plant. (®) Received dividend on equity investments. (g) Purchased building. (h) Collected bills receivable from customers. (i) Issued equity shares at a premium. P.T:0.8 1564 (j) Obtained a computer on finance lease, (4.5) On January 1 20XX, Jyoti set up Tes Analytics Company, investing Rs. 1,00,000 in share capital. The activities of the business resulted in the following revenues and expenses for 20XX: revenues and services, Rs. 1,08,000; office rent, Rs. 13,100; electricity, Rs. 9,000; salaries, Rs. 12,300; cloud storage, Rs. 3,600. the following were the assets and liabilities of the business on December 31, 20XX: equipment, Rs. 80,000; supplies, Rs. 14,500; trade receivables, Rs. 13,000; cash, Rs.3,900; rent-deposit, Rs. 1,00,000; long-term loan payable, Rs. 44,000; trade payables, Rs. 9,200. During the year, the company paid a dividend of Rs. 16,800 and Ms. Sharma made a further equity investment of Rs. 5,000 in the business. Prepare the 20XX balance sheet and statement of profit and loss. (12.5) (a) Breza Limited manufactures an exclusive watch which is marketed by a multinational company under its own brand name at a premium over the average price of other watches available in the9. market. The management has estimated the normal capacity at 100,000 units. In 2009, the company could produce only 60,000 units of the product. During the year, production of raw material was low. The fixed production overheads incurred during the year was Rs. 10,00,000. Required: Calculate the amount of fixed production overheads to be assigned to each unit produced during 2009 to calculate the cost of sales and cost of inventories held by Breza at the balance sheet date. (b) On October 20, 20XX, Raj started Darlings, a kennel as a proprietorship with an investment of 15,000. On November 17, 20XX, the business had cash of 9,000 and unpaid bills of 5,000. On that date, Raj had personal cash of 7,000 and a car worth 17,000 (bought at a cost of 40,000) and owed % 29,000 in personal bank loan. Required () How much is Raj required to pay? Par.O.1564 10 (ii) How much is Raj able to pay? (iii) Is Raj solvent or insolvent? (c) Maria, a bank lending officer, is studying the financial statements of Vault, a proprietorship selling dry fruits. She notes the following in her teview: (a) Rent expense includes rent for the proprietor’s home, (b) The company has moved from credit to cash-on-delivery terms with suppliers, (c) The cost of land was recorded as 100,000, its estimated market value, rather than its purchase price of 60,000 two years ago. (A measuring balance costing 10,000 was expensed immediately, though it is expected to be used for five years, (e) The value of a new manager was recorded as 500,000 based on the advice of the headhunter. Required Explain whether Vault’s financial statements violate, or potentially violate, any accounting principles or assumptions, (4.54444) Write short note on following ;1564 11 | | | | | | (a) Du Pont Analysis (b) Profitability Ratios (c) Business Entity Concept (12.5) In 2023, the following parties have to act based on their evaluation of DRL’s financial statements : Maharashtra Bank is examining a request from DRL for long-term financing. Bharat Chemical Company is considering the supply of raw materials on credit to DRL. Arvind Shah is thinking whether to invest his retirement benefits in DRL’s shares. Industry averages for selected ratios are given below : Profit margin 4.2% Asset turnover 1.7 times - Return on assets 74% Retum on equity 21% Earnings per share 4.21 Current ratio 1.46 P.T.O.1564 Quick ratio it: Debt-to-equity 23 Interest coverage 4.13 Price-earnings ratio 27 times Required (@)_ Select two or three indicators that would be most relevant to the three decision makers. (ii) Based on your analysis of the indicators, what? would you recommend? ci2s) $ (2500)