MUTHURANGAM GOVERNMENT ARTS COLLEGE (AUTONOMOUS)

VELLORE, CHENNAI-632 002

Department: III BCOM COMMERCE
Code: 13U5CO14
Semester: VI
Subject title: MANAGEMENT ACCOUNTING
Time: Three Hours Max: 75 Marks
Section-A (10X2=20)

Answer ALL the questions in one or two sentences:

1. State any two functions of Management Accounting?
2. Distinguish between cost accounting and management?
3. What is common size statement?
4. What is vertical Analysis of financial statement?
5. Mention the three uses of Ratio analysis?
6. State the different between current Ratio and liquid Ratio?
7. Explain the meaning of ‘Current Assets’ and ‘Current Liabilities’?
8. Explain the flow of fund?
9. What is cash flow statement?
10. List out the internal and external sources of cash?

SECTION –B (5X5=25 marks)

Answer the following questions:

11(A). Explain the advantage and limitation of Management accounting?

(OR)
(B)Define management accounting? State any six functions of Management accounting?

12(A). From the following information compute the trend percentages taking 2000 as the
base year
Particulars 1994 1995 1996 1997 1998 1999

Sales 300 340 420 480 520 600

Cost of goods sold 180 204 256 287 300 330

Office expenses 40 42 45 50 55 60

Selling expenses 20 25 30 40 50 60

Net profit 60 69 89 103 115 150

(OR)
(B) What do you understand by analysis and interpretation of financial statements?

13(A). From the following information calculated:

(a) Debtors Turnover ratio
(b) Average collection period
Total sales 1, 00,000
Cash sales (included in the above) = 20,000
Sales returns 7,000
Total debtors for sales as on 31-12-1993 = 9000
Bills receivable as on doubtful debts 2000
Provision for doubtful debts 1000
Trade creditors as on 31-12-93 10,000
(OR)
(B) From the following detail of a business concern calculate net profit ratio

sales 3,50,000
cost of goods sold 1,50,000
Administration
expenses 50,000
selling expenses 10,000
From the following details you are required to ascertain net profit and calculate net
profit ratio.
sales 5,40,000
sales return 40,000
gross profit 3,00,000
income from
investment 40,000
loss on sales of plant 30,000
operating expenses 1,20,000
provision for tax 50,000

14(A)
Prepare a statement of change in working capital from the following detail of R Ltd:

liabilities 2001 2002 Assets 2001 2001

Rs Rs Rs Rs

Equity capital 5,00,000 5,00,000 Fixed asset 6,00,000 7,00,000

Debentures 3,70,000 4,50,000 Long term 2,00,000 1,00,000
Tax payable 77 ,000 43,000 investments
Creditors 96,000 1,92,000 Work in 80,000 90,000
Dividend payable 87,000 80,000 progress
Stock 1,50,000 2,25,000
Debtors 70,000 1,40,000
cash 30,000 10,000

11,30,000 12,65,000 11,30,000 12,65,000

(OR)
(B). Calculate the Funds from Operation of X limited from the following

To salaries 10,000 By Gross profit 2,00,000

To Rent 3,000 By Profit on sale of Machines 5,000
To Commission 2,000 By Dividend Received 2,000
To Discount allowed 1,000 By refund Of Tax 3,000
To Provision for depreciation 14,000
To Transfer to General Reserve 20,000
To Loss on sale of Investment 5000
To provision for Tax 10,000
To Discount on issue of debentures 2,000
To Preliminary Expenses 3,000
To selling Expenses 20,000
To net profit 1,20,000

2,10,000 2,10,000

15(A). Selvi ltd earned profit of Rs 2, 00,000 after charging or crediting the following items
to its P&L A/c during 31-12-2000
(a) Profit on sale of investments Rs 4000
(b) Loss on sale of building Rs 9,000
(C) Depreciation on fixed assets Rs 7,000
(d) Amortization of goodwill Rs 2,000
The following detail are available for the year
particulars 1999 2000
Bills payable 5,000 8,000
Creditors 12,000 16,000
outstanding
expenses 2,000 1,000
bills receivable 20,000 18,000
debtors 40,000 60,000
prepaid expenses 2,000 3,000
accrued income 5,000 8,000
Income received in
advance 2,000 1,000
Calculate the cash from operation for the year ending 31-12-2000

(OR)
(B)Calculate Cash from Operation .Fund flow operation for the year 1998 Rs 84,000 current
assets and current liabilities as on 1-4-1998 and 31-12-1998 were as follow.

particulars 1-1-98 31-12-98

Trade creditors 1,82,000 1,94,000
Trade Debtors 2,75,000 3,15,000
Bills Receivable 40,000 35,000
Bills payable 27,000 31,000
Inventories 1,85,000 1,70,000
Trade investment 40,000 70,000
 Outstanding Expenses 20,000 25,000
Prepaid Expenses 5000 8,000

SECTION –C (3X10=30 marks)

Answer any THREE questions:
16. Explain the techniques and Tool of Managements accounting?
17. Dhandapani& co ltd finishes the following balance sheets for the years 1997 and 1998
prepare common size balance sheets.

Liabilities 1997 1998

Assets 1997 1998
share capital 2,00,000 3,00,000
building 4,00,000 4,00,000
reserve 6,00,000 7,00,000
machinery 6,00,000 10,00,000
10% debentures 2,00,000 3,00,000
stock 2,00,000 3,00,000
creditors 3,00,000 5,00,000
debtors 2,00,000 2,50,000
cash at
bills payable 1,00,000 80,000 bank 1,00,000 50,000
tax payable 1,00,000 1,20,000
15,00,000 20,00,000 15,00,000 20,00,000

18. The following figures related to the trading activities of the years ended 31-12-1990
Particulars Rs Particulars Rs
Sales 1,00,000 salary salesmen 1,800
purchases 70,000 advertising 700
travelling
closing stock 14,000 expenses 500
sales returns 4,000 salaries(office) 3000
dividend received 1,200 rent 6,000
profit on sales of fixed
assets 600 stationery 200
loss on sales of shares 300 depreciation 1000
opening stock 11,000 other expenses 2,000
provision for tax 7,000
You are required to calculate the (1) Gross profit (2) operating ratio (3) operating profit ratio
(4) Net profit ratio.

19. The following is the comparative balance sheets of Pratima co Ltd.as on 30 th June 1997
and 30 th June 1998
liabilities 1997 1998 assets 1997 1998
share capital 1,80,000 2,00,000 goodwill 24,000 20,000
reserve fund 28,000 36,000 building 80,000 72,000
P&L A/C 39,000 24,000 machinery 74,000 72,000
Trade creditors 16,000 10,800 investment 20,000 22,000
bank over draft 12,400 2,600 inventories 60,000 50,800
 provision for
taxation 32,000 34,000 debtors 40,000 44,400
provision for
doubtful debts 3,800 4,200 cash 13,200 30,400
3,11,200 3,11,600 3,11,200 3,11,600

Additional information:
(i) Depreciation charged on machinery Rs 10,000 and on building Rs 8,000
(ii) Investment sold during the year Rs 3000
(iii) Rs 15,000 interim dividend paid during January 1998
(iv) Taxes paid during the year Rs 30,000.prepare a statement of changes in working capital
(b) A fund flow statement.

20. From the following Balance sheet calculate the Cash flow statement
Liabilities 1979 1980 Assets 1979 1980
Rs Rs Rs
Share capital 1,00,000 1,00,000 Building 40,000 36,000
Bills payable 1,200 800 Goodwill 12,000 12,000
General reserve 14,000 18,000 Plant 37,000 36,000
P&L A/c 16,000 13,000 Stock 30,000 23,400
Provision for 400 600 Debtors 18,000 19,000
doubtful debts
Provision for 16,000 18,000 Bank 6000 15,000
taxation
Creditors 8000 5400 Cash 600 200
Bills receivable 2000 3200
Investment 10,000 11,000
1,55,600 1,55,800
1,55,600 1,55,800

Additional information
(A)Depreciation on plant Rs 4000
(b) Provision for Taxation of Rs 19,000 was made on the year 1980