Marwadi Education Foundations Group of Institutions, Rajkot

Faculty of Management MBA Pre Final Examination 2013-14 Max. Marks: 70 2810001 Accounting for Managers [AFM] Time: 3 Hrs.

Instructions: 1) Attempt all questions 2) Make suitable assumptions wherever necessary 3) Figures to the right indicate full marks Q. 1 (a) Explain IFRS. What are the advantages of converting to IFRS? Q. 1 (b) Advantages and disadvantages of Ratio Analysis. Q. 2 (a) Following are summarized Balance Sheets X Ltd. as on 31st December, 2012 and 2013. You are required to prepare a Fund Flow Statement for the year ended 2013. Liabilities 2013 2012 Assets 2013 2012 Share capital 125000 100000 Goodwill 2500 --GR 30000 25000 Buildings 95000 100000 P & L A/c 15300 15250 Plant 84500 75000 Bank Loan 67600 35000 Inventory 37000 50000 Trade Payables --- 75000 Trade Receivables 32100 40000 Provision for Taxation 17500 15000 Bank 4000 --Cash 300 250 Additional Information: (i) Dividend of Rs. 11,500 was paid during the year of 2013. (ii) Depreciation written off on plant Rs.7, 000 and on buildings Rs.5, 000. (iii) Provision for tax was made during the year Rs. 16,500. Q. 2 (b) Explain the difference between fund flow and cash flow statement OR Q. 2 (b) What are the causes of depreciation? Explain any three methods of providing depreciation with hypothetical figures. Q. 3 (a) Journalize the following transactions in the books of Mr. Ajit: 1. Dec. 1, 2013, Ajit started business with cash Rs. 40000 2. Dec. 3, he paid into the Bank Rs 2000 3. Dec. 5, he purchased goods for cash Rs. 15000 4. Dec. 8, he sold goods for cash Rs. 6000 5. Dec. 10, he purchased furniture and paid by cheque Rs. 5000 6. Dec. 12, he sold goods to Arvind Rs. 4000 7. Dec. 14, he purchased goods from Amrit Rs. 10000 8. Dec. 15, he returned goods to Amrit Rs. 5000 9. Dec. 16, he received from Arvind Rs. 3960 in full settlement. 10. Dec. 18, he withdrew goods for personal use Rs.1000 11. Dec. 20, he withdrew cash form business for personal use Rs. 2000 12. Dec. 24, he paid telephone charges Rs. 1000 13. Dec. 26, cash paid to Amrit in full settlement Rs 4900 14. Dec.31, paid for stationery Rs 200, rent Rs.500 and salaries to staff Rs. 2000 7 7 7 7 7

Q. 3 (b) Briefly explain GAAP OR Q. 3 (a) Briefly discuss qualitative characteristics of accounting Q. 3 (b) From the following figures extracted from the books of Shri Raghav, you are required to prepared Trading and Profit & Loss Account for the year ended 31st March 2013, and balance-sheet as on that date after making the necessary adjustments. Particulars Capital and Drawings Plant & Machinery Freehold Property Sales and Purchases Salaries Office Expenses Office Furniture Discounts and return outward Sundry Debtors and Creditors Loan to Ram @ 10% p.a. and interest over it Cash and Bills Stock on 31st March, 2012 Wages Postage & Telegram Insurance Gas & Fuel Bad debts and Provision for Bad debts Office Rent Freight Loose tools Factory lighting Adjustments: 1. Stock on 31st March 2013, was valued at 72600 2. A new machine was installed during the year costing Rs. 15400, but it was not recorded in the books as no payment was made for it. Wages paid for its erection have been debited to wages account for Rs. 200. 3. Depreciate: plant - machinery by 33.33%, furniture by 10% & freehold property by 5% 4. Loose tools were valued at Rs. 1760 on 31-03-2013 5. From debtors, write off bad debt of Rs. 600 and create the provision @ 5% 7. Manager is entitled to a commission of 10% of the net profits after charging such commission Q. 4 (a) Ram-Leela Corporation purchased an equipment for Rs.200000. The equipment was expected to be useful for six years, or 1500 hours, with an estimated residual value of Rs.20000 at the end of that time. The equipment logged 200 hours in the first year .Rate of depreciation is 31.87%. You are required to compute depreciation expense for the first year under each of the following methods: Debit 13200 99000 66000 110000 13200 2750 5500 1320 29260 44000 31900 38500 35200 1540 1760 2970 660 2860 9900 2200 1100 Credit 228800

7 7 7

231440

1100 44000 1100 5500

880

(1) Straight line method, (2) Written Down Value method, (3) Sum of the years digits method; and (4) Production Units method Q. 4 (b) Discuss in detail about salient aspects of AS-1 dealing with disclosure of accounting policies. Give a suitable example OR Q. 4 (a) Name Accounting Standard 2, 13 and 26. Explain any one in detail. Q. 4 (b) Krish Company sold 20000 crates of a soft drink at Rs. 120 during the year. Its beginning inventory consisted of 1000 crates at Rs. 70 per crate. The following purchases were made during the year; 5000 crates @ Rs. 75; 8000 Crates @ Rs. 76; 9000 crates @ Rs. 80. Operating expenses were Rs. 365000. Income tax is payable at 30 %. Calculate PAT using the FIFO and LIFO methods. Q. 5 (a) Discuss various methods of financial statement analysis. Its tools and techniques Q. 5 (b) Draw the format of Balance Sheet and P & L Account as per the Schedule VI [Revised] for companies. OR Q. 5 (a) Financial information of Dhoom Ltd is available as under. You are required to make trend 07 analysis and detailed comments on it. Particulars Net sales Cost of goods sold Gross profit Operating expenses Net income 2013 78,100 33,200 44,900 25,700 19,200 2012 75,000 32,000 43,000 22,000 21,000 2011 67,000 30,000 37,000 19,000 18,000 2010 55,000 20,000 35,000 14,000 21,000 07 07 07 7 7 7

Q. 5 (b) What do you meant by human resources accounting?

-----: Best of Luck :------