mba semester 1 assignment af.doc

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F-2,Block, Amity Campus

Sec-125, Nodia (UP)

Idia 2!1"!"

ASSI#N$%N&SP'#'A$

S%$%S&%'-I

Su*+ect Name Accouts ad Fiace

Study CUN&' SudaPemaet %ollmet Num*e (P%N)

'oll Num*e IB!1.52!1!-2!12!/5

Studet Name S$AIA &A$BA0 %0$A0I

INS&'UC&INS

a) Studets ae euied to su*mit all t3ee assi4met sets

ASSI#N$%N& 6%&AI0S $A'S

Assi4met A Fi7e Su*+ecti7e 8uestios 1!

Assi4met B &3ee Su*+ecti7e 8uestios 9 Case Study 1!

Assi4met C /! *+ecti7e 8uestios 1!

*) &otal :ei43ta4e 4i7e to t3ese assi4mets is "!; ' "! $aks

c) All assi4mets ae to *e completed as typed i :od<pd=

d) All uestios ae euied to *e attempted

e) All t3e t3ee assi4mets ae to *e completed *y due dates (speci=ied

=om time to time) ad eed to *e su*mitted =o e7aluatio *y Amity

Ui7esity

=) &3e e7aluated assi4met maks :ill *e made a7aila*le :it3i si>

:eeks &3eea=te, t3ese :ill *e destoyed at t3e ed o= eac3 semeste

4) &3e studets 3a7e to attc3ed a sca si4atue i t3e =om

Si4atue

6ate 15 Au4 2!11

( ) &ick mak i =ot o= t3e assi4mets su*mitted



Assi4met ?A@

Assi4met ?B@

Assi4met ?C@

Accounts and Finance

Assignment A

This assignment consists of 5 analytical covering the syllabus till Analysis of Financial

Statements.

Problem 1:Journalize the following transactions in the books of Mr. Walter

a! "ai# rent of buil#ing $ %&'((( half of the buil#ing is use# by the )ro)rietor for resi#entialuse.

b! "ai# fire insurance of the above buil#ing in a#vance $ %'(((.c! "ai# life insurance )remium $ &'(((.#! "ai# income*ta+ $ ,'(((.e! Salary #ue to clerk $ 5((.f! -harge #e)reciation on furniture %(/ ).a. for % month 0furniture $ %&'(((!.g! "rovi#e interest on ca)ital 0$ 1('(((! at %5/ ).a. for 1 months.h! -harge interest on #rawing 0%('(((! at %2/ ).a. for 1 months.

i! "rovi#e interest on loan to 3am 0$ %(('(((! at %2/ ).a. for & months. j) -harge interest on loan to Shyam 0$ &(('(((! at %2/ ).a. for & months.k! 3eceive# commission $ %'((( half of which is in a#vance.l! 4rokerage #ue to us $ 5((.

Transaction Number

Assets Laities Share holderequity

Explanation

A -12!!! -12!!! "aid rent o#

buildin$% -1!!! -1!!! "aid #ire

insurance

& -2!!! -2!!! "aid li#einsurance

' -(!!! -(!!! "aid income-tax

E -!! -!!! Salary due tocler*

+ -12!!! -12!!! &har$edepreciation on#urniture ,1! p.a. #or 1month/#urniture 012!!!).



3!!!! 3!!!! "ro4ide intereston capital /03!!!!) at 1

p.a. #or 3months.

5!!5!!

6 -7!! 7!! -7!! &har$e intereston dra8in$/1!!!!) at19 p.a. #or 3months.

: -(!!! -(!!! "ro4ide intereston loan to ;am/0 1!!!!!) at

19 p.a. #or 2months

Journal in the books of Mr. walter

Particulars L/F

Debit Amount

in !s"

#redit Amount

in !s"

-ash acTo rent e+)ense ac

6r 7 7

%&(((%&(((

8For the amount )ai# half of buil#ing.9

cash acTo )re)ai# insurance ac

6r 7 7

%'(((%'(((

8For the amount )ai# for buil#ing in a#vance.9*cash ac 6r*&(((

To life insurance cr*&(((

-ash acTo ta+ e+)ense ac

6r 7 7

,'(((,'(((

8For the amount )ai# towar#s income ta+.9



-ash acTo Salary ac

6r 7 7

5((5((

8For the amount )ai# clerk.9

:ffice e+)enseacTo #e)reciation ac

6r 7 7

%&(((%&(((

8For the value of %(/ charge interest )er month.9

;nterest acTo ca)ital ac 6r 7 7 1(((( 1((((

8For the %5/ annually )rovision.9

;nterest acTo #rawing ac

6r 7 7

%('(((%('(((

8For the %2/ annually charge inetrest .9

;nterest acTo 3am ac

6r 7 7

%(('(((%(('(((

8For the %2/ annually loan .9

;nterest )ayable acTo Shyam ac

6r 7 7

&(('(((&(('(((

8For the amount change %2/ annually loan !

-ommission acTo walter ac

6r 7 7

%'(((%'(((

8For the amount receive# in a#vance !

brokerage acTo Walter ac

6r 7 7

5((5((

8For the amount #ue for brokarage!

Problem $:From following figures e+tracte# from the books of Mr. <=>' you are re?uire# to )re)are a Tra#ing@ "rofit @ oss Account for the year en#e# ,%st March' &((2 an# a 4alance Sheet as on that #ateafter making the necessary a#Bustments.

$ $

Mr. <=>Cs -a)ital &&2'2(( Stock %.D.&((E ,2'5((

Mr. <=> 6rawings %,'&(( Wages ,5'&((

"lant @ Machinery GG'((( Sun#ry cre#itors DD'(((Freehol# )ro)erty 11'((( "ostage @ Telegrams %'5D(

"urchases %%('((( ;nsurance %'E1(

3tuens outwar#s %'%(( Has @ fuel &'GE(

Salaries %,'&(( 4a# #ebts 11(

:ffice I+)enses &'E5( :ffice rent &'21(

6iscount Ac 06r.! 5'5(( oose tools &'G((



Sun#ry 6ebtors &G'&1( Factory lighting %'%((

oan to Mr. rish %(/ ).a. DD'((( "rovision for #oubtful #ebts 22(

4alance on %.D.&((E ;nterest on loan to Mr. rish %'%((

-ash at bank &G'&1( -ash in han# &'1D(

4ills )ayable 5'5(( sales &,%'DD(

Ad%ustments:a! Stock on ,%st March' &((2 was value# at $ E&'1((b! A new machine was installe# #uring the year costing $%5'D(( but it is not recor#e# in the

books as on )ayment was ma#e for it. Wages $ %'%(( )ai# for its erection has been#ebite# to the wages account.

c! 6e)reciate a. "lant @ machine by ,,.,,/b. Furniture by %(/c. Freehol# )ro)erty by 1/

#! oose tools were value# at $ %.E1( as on ,%.,.&((2e! :f the sun#ry #ebtors 3s.11( are ba# an# shoul# be written off.f! Maintain a )rovision of 5/ on sun#ry #ebtors for #oubtful #ebts.

g! The manager is entitle# to a commission of %(/ of the net )rofits after charging suchcommission.

Problem &:

Following is the Trial 4alance of Ms. Trinity Foo#s as on ,(th June &((E 0after closing Kominal Accounts!. "re)are a 4alance Sheet on the basis of this trial balance.

Particulars Debit !s." #redit in !s."

-ash %('(((-a)ital %(('(((4ank EE'(((Furniture &5'(((

3am %5'(((3ahim 5('(((Tra#ing @ "rofit @ oss DE'(((

1'$())) 1'$()))

Problem *:

Hiven below are the financial statements of Safal Inter)rises' using the tool of ratio analysiscomment on the )rofitability an# li?ui#ity )osition of the firm for the year &((1*(E. Total no. ofshares outstan#ing for the firm is &.1Gcrores. ;n the view of growth o))ortunities in the near futurethe firm has been maintaining a )olicy of D5/ )ayout.

Summarize# " @ of Safal Inter)risesFor the year en#e# ,% March

"articulars &((1 &((E0 3s. ;n crores!

Sales %,&.(( %DD.((:ther income %&.(( %5.((-ost of sales %(&.G1 %%(.(&+ross margin $,.)* &&.,-



:)erating e+)enses A#ministration %&.DD %D.,1Selling @ #istribution D.D& 5.,1

Profit before interest ta P02" $*.1- $,.$'

;nterest ,.(( D.(%Profit before ta P02" $1.1- $3.$'

"rovision for ta+es E.GD G.DEProfit after ta PA2" 1&.$* 13.4,

4alance Sheet of Safal Inter)rises

"articulars ,%(,(1 ,%(,(E03s in crores!

Assets

Fi+e# assets ,%.&5 ,E.5(-urrent assets

;nventory %D.51 %1.1D Accounts receivable %,.&( %5.D,

-ash %.5( %.E5ess -urrent liabilities 2.55 %%.&5Ket current assets &(.E% &&.5E2otal Assets 31.,' ').)4

Liabilities owners e5uit6

Share ca)ital &E.(( &E.((3eserves @ Sur)lus D.G1 1.,16ebt0long term! &(.(( &1.E%2otal 31.,' ').)4

Problem 3:Hiven below are the balance sheets of the two firms* Hloria t# an# Lictoria t# as on ,%st March&((E.

+loria Ltd. 7ictoria Ltd.

Assets

-ash an# 4ank balance %&.E( ,2.1(Marketable securities %(.(( &%.((Sun#ry #ebtors &&.(( &,.E("re)ai# e+)enses G,.5( %1&.D5

#urrent Assets %.%& &.%DFied Assets 8et" %,G.,& &DE.G(

2otal Assets 52G.(( 1D&.((4$-.&$& --,.-,3

Liabilities and 9wners 5uit6

Sun#ry cre#itors 1.E5 &1.D5Kotes )ayable 1.51 1.D5ong term #ebt %,(.(% ,D5.((I?uity 525.(( 5%&.((

2otal 4$-.&$& --,.-,3



%. -an the financial )ositions of the two firms be com)are# assuming that the two firms fallin the same in#ustry

Assignment 0

This assignment is covering the remaining syllabus an# a case stu#y.

Problem 1:

Fin# out the cost of raw material )urchase# from the #ata given belowParticulars !s.

"rime cost &(('(((-losing stock of raw material &('(((6irect labour cost %(('(((I+)enses on )urchasesC %('(((

Problem $:

The )ro#uct of a manufacturing concern )asses through two )rocesses A an# 4 an# then tofinishe# stock. ;t is ascertaine# that in )rocess A normally 5/ of the total in)ut is scra) whichrealizes 3s. 2( )er tonne.

From the following information relating to )rocess A for the month of August &((E' )re)are)rocess A accountMaterials 5(( tonnes-ost of materials 3s. %&5 )er tonneWages 3s. %D'(((Manufacturing overhea#s 3s. D'(((:ut)ut D%5 tonnes

Problem &:

Ahme#aba# -om)any t#. manufactures an# sells four ty)es of )ro#ucts un#er the bran# name Ambience' u+ury' -omfort an# avish. The sales mi+ in value com)rises the following

4ran# name "ercentage

Ambience ,, %,u+ury D% &,



-omfort %1 &,avish 2 %, ****** %((

The total bu#gete# sales 0%((/! are $ 1(('((( )er month.

The o)erating costs are

Ambience 1(/ of selling )rice u+uryu+ury 12/ of selling )rice -omfort-omfort 2(/ of selling )rice avishavish D(/ of selling )riceThe fi+e# costs are $. %5G'((( )er month.

a) -alculate the breakeven )oint for the )ro#ucts on an overall basis.b) ;t has been )ro)ose# to change the sales mi+ as follows' with the sales

)er month remaining at $. 1'(('(((

4ran# Kame "ercentage

Ambience &5u+ury D(-omfort ,(avish (5 *** %((

Assuming that this )ro)osal is im)lemente#' calculate the new breakeven )oint.

#ase stud6:

0a%a% Auto Limited: 2he ;n<recedented +rowth =tor6

4aBaB Auto imite# is the flagshi) com)any of the 4aBaB Hrou). The com)any manufactures two @three wheelers. Mr. 3ahul 4aBaB is the )resent -hairman of the com)any. The com)any wasincor)orate# in the year %GD5 as Ms 4achraB Tra#ing -or)oration "rivate t#. The )romotershol# about ,(/ e?uity' whereas ;n#ian )ublic hol#s about &1/ an# institutional investors havemore than &E/ stake in the com)any.

The )ro#ucts manufacture# by 4aBaB Auto are scooters' motor cycles' auto s)ares )arts' machinetools' steel an# engineering )ro#ucts. The com)any also )ro#uces three* wheelers as goo#scarriers such as )ick*u) or #elivery vans an# )assenger carriers such as auto*rickshaws. 4aBaB

Auto has a network of DG2 #ealers' %'5(( authorize# service centres an# %1& e+clusive three*wheeler #ealers s)rea# across the country.

4aBaB Auto has also #iversifie# into the general as well as life insurance business through its

subsi#iaries 4aBaB Allianz Heneral ;nsurance -om)any t#' res)ectively. The 4aBaB bran# has)resence in many countries such as Sri anka' Me+ico' 4angla#esh' -olumbia' "eru' Igy)t' etc.The main com)etitors of the com)any in the two*wheelers an# three*wheelers segment are* NeroNon#a Motors t#' inetic Motor -o t#' M lt#' Maharashtra Scooters t#' an# TLS Motor -o.t#.

The com)any sol# close to &, lakh vehicles in &((5*(1' which is a recor# )erformance in itshistory. The sales of motorcycles manufacture# grew by ,&/ in &((5*(1 com)are# to a marketgrowth of below %G/. For the fifth successive year' the com)any raise# its market share in themotorcycle segment. To#ay it stan#s at almost ,%/. Sales increase# by almost ,%/ to an all*



time high of 3s G'&25 crore in &((5*(1. the e+)ort of the com)any in all its )ro#uct categories hasalso been un)rece#ente# #uring the F= &((5*(1 as is reflecte# in the figures given below

2able A Product>wise e<orts of 0a%a% Auto Ltd

Product $))3>)' $))*>)3 +rowth

in numbers " in <ercentage"

Motorcycles %15'&22 %&,'GD1 ,,Total two*wheelers %ED'G(E %,('GD5 ,D

Three*wheelers E5'&GE 15'E15 %DTotal vehicles &5('&(D %G1'E%( &EIven more im)ressive has been the growth in com)anyCs o)erating I4;T6A' which increase# byDE/ to touch 3s %2(5 crore #uring &((5*(1. -onse?uently the o)erating I4;T6A margin grew by&&( basis )oints to %E.G/ of the sales an# o)erating income. Iarnings )er share have been risenfrom 3s E5.1( to 3s %%%.(( in the current year. 6ivi#en# too has grown to 3s D( )er share0D((/! for the year en#e# ,%st March &((1 as against 3s &5 )er share in &((5.

:ver the )ast few years' 4aBaB Auto has focuse# on his technology #evelo)ment' an# )ro#uct#evelo)ment in antici)ation of market nee#s' scaling u) its manufacturing facilities' im)lementingbest*in*class )ro#uction systems' rationalizing ven#ors' slashing costs while u)gra#ing ?uality'restructuring #ealershi)s' an# #istribution channels. These ca)abilities enable# the com)any tocreate e+citing new )ro#ucts' which have set benchmarks in styling' #esign' an# technology. Thecom)anyCs )ro#ucts are creating a customer )ull at all )rice )oints an# the com)any has nowtransforme# from being a )rice warrior to a )rice lea#er. The results of these strategies arereflecte# in its financial statements as follows 0refer Table 4 an# -!

2able 0 Profit and Loss Account for 0a%a% Auto Ltd for the 6ear ended

March $))& March $))* March $))3 March $))'

!s in crore"

Sales DG2E.(5 5E&%.DD E(E2.(1 G&2D.2D:ther income &GE.%( 5(E.(D 5%1.D% 1(&.5&-hange in stocks ,&.G& %(.2E *%%.5E 5(.%(

3&14.)4 '$&,.&3 43-$.,) ,,&4.*'

I+)en#iture *&&3.1' 3)14.,$ '$-'.,1 -1&1.-4

"rofit @ oss"46;T ,-1.,1 1$$1.*& 1$,3.,, 1-)3.3,

;nterest %.%& (.GD (.1E (.,D6e)reciation %E%.D& %2D.,& %25.11 %G%.&2"4T 2(G.,E %(,1.%E %%(G.11 %1%,.GETa+ )rovision &ED.DD &25.D% ,DG.,& 5(G.,E"AT 3&*.,& 43).4' 4').&* 11)*.')

6ivi#en#s %5G.2% &25.,E &22.1D D1%.5(

2able # Assets and Liabilities of 0a%a% Auto Ltd as on &1 March $))'

Liabilities Mar )3 Mar )' Assets Mar )3 Mar )'

!s in crore !s in crore

8et ?orth ***4.1' 3&*,.4, +ross fied assets $-4).)$ &),$.$-"ai# u) I?uity ca)ital %(%.%2 %(%.%2 -a)ital W;" G.%D &5.&14onus I?uity ca)ital %%D.%E %%D.%E ess cumulative

#e)reciation%11(.,& %2,D.%G

Minority interest 2G.D1 %D2.EG Ket fi+e# Assets %&(5.1D %&,(.EE!eser@es =ur<lus *$3'.3$ 3),,.-$ n@estments 3$4&.-& '-'3.*&

Free reserves D&,,.&2 5(E1.52 Deferred ta assets G.&( 1.D, Share )remiumreserves

2E.(E &25.E2 n@entories &&D.E( &ED.DE



:ther free reserves D%D1.&% DEG(.2( !ecei@ables ,%%1.(5 5EGG.%%S)ecific reserves &,.&D &,.&D Sun#ry #ebtors %E1.GE ,(&.5D0orrowings %&&G.%E %D1G.DD 6ebtors e+cee#ing 1

months(.&( %.%,

Deferred taliabilities

%,G.G( 2E.52 A#vancesloans tocor)orate bo#ies

1&.&G ,,.11

#urrent liabilities <ro@isions

D&2D.1D EEE,.&( Hrou)associatecom)anies

,D.DD %G.D%

Sun#ry -re#itors 2,,.21 %D(D.D( :ther com)anies &E.25 %D.&5

:ther current liabilities %%1G.(D ,1ED.,E A#vance )ayment ofta+ %2&,.1( %21G.D(

"rovisions &&2%.ED &1GD.D, :ther receivables %(5,.%G ,5G,.5%#ash 0ankbalance

&11.22 DE1.D2

ntangible/D! notwritten off

D.5E &E.,&

2otal Liabilities 1)1)).-4 1*'-).)1 2otal Assets 1)1)).-4 1*'-).)1

Kotwithstan#ing its e+cellent financial )erformance in the years following its maBor strategic shift'the management of the firm believes in the )hiloso)hy that the ?uest for )erfection is eternal.

To )reclu#e the com)lacency from setting in' the management not only sets higher stan#ar#s italso continuously monitors its )erformance an# benchmarks with the in#ustry )erformance ingeneral an# their closest com)etitorsC results in )articular.

Discuss%. ;s the )rofitability )erformance of the firm satisfactory ;f not' how can it be im)rove#&. Now attractive is the firm from the short*term an# long*term len#ers' )ers)ective 6oes

the firm a))ear to be the favorite #estination in the automobile sector 0two*wheelers an#three*wheelers segment! for the len#ers

,. Now efficient is the firm been in utilizing the resources at its #is)osal Now #o you thinkthe com)any can im)rove u)on its efficiency

Assignment #B

=tate whether the following are trueB or falseB:

1.Accounting is a language of business.&'U%

2.Accounting is a service function.&'U%

3.Accounting records only those transactions and events which are financial

character.FA0S%4.Drawings reduce capital.&'U%

5.Capital is increased by profit and decreased by losses.&'U%

6.The system of recording transaction on the basis of their two old aspects is

called double entry system.&'U%



7.Purchases made from B for cash should be debited to B.FA0S%

8.Earnings of revenue means increase in Cash/Bank balance&'U%

9.The balance of an account is always known by the side which is shorter.

FA0S%

10.The return of goods by a customer should be debited to Returns Inwards

Account.&'U%

11.Goods bought for resale are referred to as Stocks&'U%

12.If the business has any liability, the proprietor’s capital must be more than

the total assets.FA0S%

13.Withdrawal of money by the owner is an expense for the business.&'U%

14.Ledger is called the book of final entry.&'U%

15.Cash book is used to record all receipts and payments of cash.&'U%

16.Sales book is used to record all credit sales.&'U%

17.The journal is not a book of original entry.&'U%

18.Goodwill is an intangible asset.&'U%

19.Salaries & Wages appearing in the trial balance are shown on the liabilities

side of the balance sheet.&'U%

20.The profit & loss account is one of the financial statements.&'U%

21.Share having preferential right as to dividend and repayment of capital

are termed as equity share capital.&'U%

22.Shares which are not preference shares are called equity shares.FA0S%

23.The amount of share premium received by the company is shown under

the heading reserves & surplus in the company’s balance sheet.FA0S%



24.Debenture holders are not the member of the company.FA0S%

25.There are no legal restrictions, similar to shares, for issue of debentures at

discount.FA0S%

26.Fixed cost per unit remains constant.&'U%

27.Direct cost is that cost which can not be easily allocated to cost units.

FA0S%

28.Selling overheads form a part of cost of production.&'U%

29.Manufacturing and administrative overheads are different.&'U%

30.Total fixed cost remains unaffected by the change in volume of output.

&'U%

31.Variable cost per unit remains fixed.FA0S%

32.In chemical industries unit costing is used.&'U%

33.The output of a process is transferred to next process.&'U%

34.Good units bear the abnormal loss arising in the process costing.&'U%

35.Excess of pre-estimated loss over actual loss is known as abnormal loss.

&'U%

36.Marginal costing is a method of ascertaining cost.&'U%

37.A firm earns no profit or incurs no loss at BEP.&'U%

38.Margin of Safety implies ‘Break Even Point’.&'U%

39.In marginal costing, stock is valued at fixed costs.&'U%

40.Sales below BEP mean profit.FA0S%

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