Nov 2010

MBA- I semester

MB0041- Financial & Management Accounting – 4 Credits

Book ID- ( B1130 )

Assignment Set 1- (60 Marks)

Note: Answer all the questions.

1. Accounting Principles are the rules based on which accounting takes place and these rules

are universally accepted. Explain the principles of materiality and principles of full disclosure.

Explain why these two principles are contradicting each other. Your answer should be

substantiated with relevant examples. (10 Marks)

2. Journalize the below transactions, prepare relevant ledger accounts and finally trial balance.

. ( 6+6+3 = 15 Marks)

M/s Ventak Enterprise Pvt Ltd.

01.01.2009 Started business with cash Rs. 2,00,000 Goods Rs. 1,00,000 Furniture Rs.

50,000

01.01.2009 Opened Current Account with Rs. 1,00,000

02.01.2009 Placed an order with Ritik for the supply of goods of the list price of Rs. 1, 00,

00.In this connection, we paid 9% of the list price as an advance by cheque.

03.01.2009 Ritik supplied goods of the list price of Rs. 1, 00,000 less 12% trade discount.

Packing and delivery charges Rs. 1,000.

04.01.2009 Purchased goods from Murali of the list price of Rs. 1,00,000 less 12% trade

discount and paid him by cheque under a cash discount of 5%

05.01.2009 Received an order from Shyam for supply of goods of the list price of Rs. 1,

00,000 with an advance of 10% of list price.

06.01.2009 Supplied the above goods at 10% trade discount. Packing and delivery charges

Rs. 1000.

07.01.2009 Goods costing Rs. 80,000 sold to Mr X at a profit of 20% on sales less 10%

trade discount and 2% cash discount

08.01.2009 Goods (cost Rs. 3,000, Sales Price Rs. 4,000) taken away by the proprietor for

his personal use.

09.01.2009 Shyam became insolvent and paid 80 paise in a rupee in full and final

settlement

10.01.2009 Paid Ritik 80% on account.

11.01.2009 Goods (Cost Rs. 3,000 , Sales Price Rs. 4,000) stolen

12.01.2009 Paid Life Insurance Premium Rs. 1,000.

13.01.2009 Cash embezzled by an employee Rs. 1,000.

3. Explain any two types of errors that are disclosed by trial balance with examples and

rectification entry.

Note - Avoid giving examples given in the self learning material. (10 marks)

Nov 2010

4. Let us assume you have been recently appointed as Management Accountant of a small but

upcoming firm. Your immediate supervisor has asked you to prepare certain financial ratios

from the balance sheet of one of their clients M/s Vinod Enterprise.

Liabilities Amount Assets Amount

Equity Share Capital 50000 Fixed assets 87500

8% Pref Share Capital 10000 Investments 25000

Reserve Fund 40000 Stock 30000

6% Debentures 20000 Sundry Debtors 13500

Sundry Creditors 30000 Bank Balance 7000

P & L account Year 2000 - 1000 2001 - 20000

21000

Preliminary expenses 8000

Total 171000 Total 171000

The director intent to transfer a sum of Rs.5000 out of the current year’s profit to provision

for tax. The financial ratios needed are:

a. Return on capital employed

b. Current ratio

c. Fixed assets to networth

d. Debt - Equity ratio

e. Return on owner’s capital. (10 Marks)

5. A friend of you has approached to help him out in setting his books of accounts in order.

Unfortunately he is struck with difference in trial balance. Help him in redrafting the trial

balance. (5 Marks)

Sl.no Particulars Dr Cr

1 Stock on 31st Dec,2008 1,92,100

2 Capital 13,450

3 Cash in hand 1,400

4 Bank Overdraft 9,320

5 Sales 2,36,400

6 Purchases 106,400

7 Returns inward 13,400

8 Returns outward 2,960

9 Carriage outward 2,360

10 Carriage inward 14,260

11 Salaries 9,600

12 Wages 3,660

13 Sundry debtors 16,300

14 Sundry creditors 37,360

15 Stock on 1st Jan 2006 94,120

16 Land and building 15,000

17 Plant and machinery 20,900

18 Trade expenses 2,090

3,95,540 3,95,540

6. Explain the accounting treatment of bad debt and provision for doubtful debts with suitable

example. (10 Marks)

Nov 2010

MBA- I semester

MB0041- Financial & Management Accounting – 4 Credits

Book ID- ( B1130 )

Assignment Set 2- (60 Marks)

Note: Answer all the questions.

1. The Balanced Score Card is a framework for integrating measures derived from

strategy. Take an Indian company which has adopted balance score card

successfully and explain how it had derived benefits out of this framework.(10 Marks)

2. What is DuPont analysis? Explain all the ratios involved in this analysis. Your answer

should be supported with the chart. (10 Marks)

3. Prepare Funds Flow statement from the following balance sheets and additional

information

Liabilities 1998 1999 Assets 1998 1999

Eq Share capital 7,50,000 9,00,000 Good will 20,000 15,000

13% debentures 2,50,000 2,00,000 Plant & Machinery 3,50,000 4,50,000

Profit and loss a/c

40,000 50,000 Land & building 6,50,000 6,59,000

General reserve 40,000 50,000 Investments 40,000 1,48,000

Creditors 50,000 60,000 Debtors 50,000 30,000

Bills payable 30,000 20,000 Stock 80,000 90,000

Provision for tax 50,000 60,000 Bills receivable 70,000 50,000

Prov for dep on land and building

1,00,000 1,40,000 Bank 40,000 30,000

Total Preliminary expenses

10,000 8,000

13,10,000 14,80,000 total 13,10,000 14,80,000

Additional information

1. Provision for depreciation on P&M was RS40,000 o 31st March 1998 and Rs.45,000

on 31st March 1999

2. Machinery costing Rs.36000 (acc dep Rs12,000) was sold for Rs.20,000

3. Investment costing Rs.30000 were sold at a profit of 20% on cost

4. Tax of Rs.30000 were paid (20 marks)

4. The standard cost of a certain chemical mixture is:

35% Material A at Rs.25 per kg

65% Material B at Rs.36 per kg

A standard loss of 5% is expected in production

Nov 2010

During a period there is used:

125kg of Material A at Rs.27 per kg and

275kg of Material B at Rs.34 per kg

The actual output was 365 kg

Calculate

a. Material cost variance

b. Material price variance

c. Material mix variance

d. Material yield variance

Hint: Use net standard output (deduct the loss) (20 Marks)