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M.F.C. DEGREE EXAMINATION, MAY 2011. MANAGEMENT CONCEPTS AND PRACTICE Time : Three hours Maximum : 100 marks PART A (5 8 = 40 marks) Answer any FIVE questions. 1. Discuss the importance of planning. 2. How does forecasting differ from planning? 3. Explain the features of MBO. 4. Explain the principles of decision making. 5. Compare and contrast centralisation with decentralisation. 6. Explain the different barriers of communication. 7. What is the importance of motivation? 8. Differentiate authority from power. PART B (4 15 = 60 marks) Answer any FOUR questions. 9. Compare and contrast the contributions of Taylor and Fayol towards management. 10.State the main causes of conflict between line and staff officials in an enterprises. How can they be removed? 11.Briefly explain the theories of motivation. 12.What are the sources of recruitment? What factors are to be considered while giving promotion? 13.Explain the different types of communication. 14.What do you mean by MBO? What are the steps involved in it? 15.Explain the techniques of control. 1

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M.F.C DEGREE EXAMINATION, MAY 2011. FINANCIAL ACCOUNTING AND ANALYSIS Time : Three hours Maximum : 100 marks PART A (5 8 = 40 marks) Answer any FIVE questions. 1. What are basic accounting concepts? Explain the various types of accounting concepts. 2. State the tools and techniques of Financial Statement Analysis. 3. Explain briefly the advantages of Human Resource Accounting. 4. Write a brief note on applications of computer in Business. 5. Explain with suitable examples the errors that are disclosed by the Trial Balance and errors not disclosed by the Trial Balance. 6. The Reserve for Doubtful Debts Account showed a credit balance of Rs. 1,500 on 1.1.2007. During 2007, bad debts amounted to Rs.1 ,1 00. The debtors on 31.12.2007 owed Rs. 40,000. Maintain a 5% reserve for doubtful debts. During 2008, bad debts came to Rs. 800. On 31.12.2008, the debtors owed Rs. 44,000. The bad debts in 2009 amounted to Rs.400. On 31.12.2009, the debtors owed Rs. 30,000. Pass journal entries. 7. Crompton Ltd., has provided the following details relating to its working for the year 2009 and you are required to ascertain Funds from operation for the year: The opening and closing balances of Profit and loss account were Rs.40,000 and Rs.60,000 respectively. Profits on sale of motor car Rs.8,000 was credited to the Profit and loss account whereas it was debited with loss on sale of machinery Rs.20,000. Preliminary expenses written off Rs.4,000. Goodwill writtcn off Rs.l0,000 were also debited to the Profit and loss account. Transfers and appropriations shown were: To the general reserve Rs. l5,000 to the debenture sinking fund Rs. 10,000 and dividend proposed

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Rs.

20,000.

Depreciation

on

fixed

assets

charged

was

Rs. 18,000. 8. What are the limitations of historical cost accounting? PART B (4 15 = 60 marks) Answer any FOUR questions. 9. Discuss the scope of accounting standards. 10.Critically evaluate the Current Cost Accounting (CCA) for price level changes. 11.Explain briefly the methods of valuation of Human Assets. 12.Mr.Kumar keeps his books under single entry. His assets and liabilities were as follows : 1.1200 9 Debtors Creditors Stock Fixed assets 5300 1500 1700 2140 31.12.200 9 8800 1950 1900 1740

Other details are Rs. Total sales (including cash sales Rs. 500) 10,00 0 Total purchases (including cash purchases Rs. 2050) Fixed assets paid for General expenses 3 500 1000 4500

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Drawings Cash in hand at the end

300 410

Stock taken by proprietor for personal use Rs.500. Allow interest on capital at 5% p.a. Prepare final accounts for the year ended 31.12.2009. 13.The following ledger balances were extracted from the books of Madhumathi. You are required to prepare trading and profit and loss accounts and balance sheet as on 31.3 .2008. Rs. Capital Drawings Purchases Stock (1.4.2007) Sales Creditors Rent Discount (Cr.) Furniture and fixtures Machinery Travelling expenses Debtors Adjustments: (a) (b) (c) (d) Closing stock was valued at Rs.8900 Insurance prepaid Rs.250 Outstanding Rs. 200 expenses: Salaries Rs. 100, Rent 10,00 Returns inwards 0 2,000 Returns outwards 20,80 Carriage inwards 0 6,900 Wages 27,50 Salaries 0 8,100 Interest 1,000 Carriage outwards 270 Insurance 900 Bank Loan 5,000 Cash in hand 650 Bad debts 7,500 Rs. 300 580 400 325 900 480 700 900 3,00 0 575 120

Interest on bank loan Rs. 150 4

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(e) (f)

Depreciate machinery and furniture by 10% each Provide for doubtful debts at 5% on debtors.

14.From the following information, make out a statement of Proprietors Fund with as many details as possible : (a) (b) (c) Current Ratio Liquid Ratio Proprietary Ratio (Fixed Assets / Proprietors funds) (d) (e) (f) (g) Working capital Reserves and surplus Bank overdraft fictitious assets. 15.The Balance sheets of the firm as on 31st December, 2008 and 2009 are given below :
Liabilities Share capital 2008 2009 Assets 2008 2009 1,00,00 1,60,00 Fixed 0 0 assets at cost 70,250 60,000 50,000 28,000 85,300 Inventory 40,000 Debtors Expenses prepaid 48,000 Bank 1,52,00 2,00,00 0 0 93,400 30,800 3,950 28,100 89,200 21,100 3,000 20,000

2.5 1.5 0.75

Rs. 60,000 Rs. 40,000 Rs. 10,000

There is no long term loan or

Retained earnings Accumulated 12% Debentures Sundry creditors

3,08,25 3,33,30 0 0

3,08,25 3,33,30 0 0

The additional information for 2009 are also given: (a) (b) (c) (d) Net profit Rs.27,050. Depreciation charged Rs.10,000. Cash dividend Rs. 12,000. declared during the period

An addition to the building was made during [he year at a cost of Rs. 78,000 and fully depreciated equipment costing Rs. 30,000 was discarded as no salvage being realized. Prepare Cash Flow Statement. 5

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M.F.C. DEGREE EXAMINATION, MAY 2011. COST AND MANAGEMENT ACCOUNTING Time : Three hours Maximum : 100 marks PART A (5 8 = 40 marks) Answer any FIVE questions. 1. Define costing and discuss briefly its uses. 2. What is idle time and how should it be treated in cost accounts? 3. Explain the term Marginal Costing. What are its merits? 4. What are the requirements of a good budgetary control system? 5. In a factory where Rowan system is introduced worker X can earn Rs. 33.75 on a job for which standard time fixed is 12 hours. The rate is Rs. 3 per hour. Calculate what would be his earnings, if Halsey plan on 50:50 basis had been followed. 6. Determine the amount of fixed expenses from the following particulars: Rs. Sales Direct Material Direct labour Variable overheads 2,50,00 0 80,000 50,000 60,000

7. A factory requires 2000 units of a certain material for a year. Cost of carrying one unit at this material is calculated to be Re. 1 per annum and it is estimated that the expenses of placing an order and receiving would amount to Rs. 10. Calculate EOQ. 8. From the following you are required to calculate: Material cost variance, Material price variance and Material usage variance.

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Quantity of material purchased Value of material purchased Standard quantity of material required for one tonnes of finished product Standard rate of material Opening stock of material Closing stock of material Finished production during the period PART B (4 15 = 60 marks) Answer any FOUR questions.

3000 units Rs.9000 25 units

Rs.2 per unit nil 500 units 80 tonnes

9. Draw up a flexible budget for overhead expenses on the basis of the following data and
determine the 80 % plant capacity. overhead rates at 60 %, 70% and

60% capacity Rs. Variable Overheads: Indirect labour Stores including spares Semi-variable overheads: Power (40% fixed, 60% variable) Repairs and maintenance (60 % fixed, 40% variable) Fixed overheads: Depreciation Insurance Salaries Total Overheads

70% capacity Rs. 12,000 4,000

80% capacity Rs.

20,000 2,000

11,000 3,000 10,000 62,000

Estimated directed labour hours. 124000 hrs. 10.The standard cost of a certain chemical mixture is 40% material A at Rs.25 per kg. 60% material B at Rs. 36 per kg 7

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A standard loss of 10% is expected in production. During a period, the actual usage and prices were: 150 kgs of material A at Rs. 27 per kg. 260 kgs of material B at Rs.34 per kg. The actual output was 360 kgs. Compute all material variances. 11.The following receipts and issues were made of a new item of stores. Receipt Issue s s Units 2005 January 1 , February 28th March 1st March 31st Tabulate the values of: (a) (b) (c) (d) (i) (ii) Issues made on 28th February. Resulting stock on 28th February; Issues made on 31st March and Resulting stock on 31st March. LIFO basis and FIFO 1,000 1,20 0
st

Rs. 1,00 0 800

Units 1,200 1,200

1,000 1,000

February 1st

When issues are price on:

12.The following particulars are extracted from the booked and other relevant sources in respect of Ms A and Co. (a) (b) (c) (d) Estimated materials cost of job is Rs.50,000 and the direct labour cost is likely to Rs.10,000. In machine shop it will require machining by German machine for 20 hours and Japanese machine for 6 hours. The machine hour rate for German and Japanese Machines are Rs.100 and Rs.150 respectively. The direct wages in all other shops last year amounted to Rs.8,00,000 and against Rs.4,80,000 factory overheads.

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(e)

Last year factory cost of all jobs amounted to Rs.25,00,000 as against Rs.3,75,000 office expenses.

Make out a quotation with 20% profit on selling price. 13."Costing is an approximation of figures" Explain. 14.Describe briefly the main features of process costing. Compare process costing with job costing. 15.Explain the term 'Break Even Analysis'. Enumerate the merits and demerits.

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M.F.C. DEGREE EXAMINATION, MAY 2011. QUANTITATIVE TECHNIQUES Time : Three hours Maximum : 100 marks PART A (5 8 = 40 marks) Answer any FIVE questions. All questions carry equal marks. 1. Discuss the various steps involved in quantitative classification. 2. The mean age of a group of 100 persons was found to be 32.02. later it was discovered that age 57 was misread as 27. Find the correct mean. 3. From a moderately skewed distribution of retail prices for men's shoes, it is found that the mean price is Rs.20 and the median price is Rs.17. If the coefficient of variation is 20%. Find the pearsonian coefficient of skewness of the distribution. 4. The mean of 50 items is 25 and their standard deviation is 2. Find the sum and the sum of the squares of all the items. 5. A sales man is known to sell a product in 3 out of 5 attempts while another sales man in 2 out of 5 attempts. Find the probability that . (a) (b) no sale will be effected when they both try to sell the product, and Either of them will succeed in selling the product.

6. How do you test the significance of the difference between the means of the two samples? 7. Find the most likely production corresponding to a rainfall 40 " from the following data: 9

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Rainfall Average Standard Deviation Coefficient of correlation 30" 5" 0.8

Productio n 500 kgs 100 kgs

8. Explain clearly the various ingredients of a decision problem. What are the basic steps of a decision making process? PART B (4 15 = 60 marks) Answer any FOUR questions. All questions carry equal marks. 9. What are the essentials of a good questionnaire? Draft a suitable questionnaire to enable you to study the effects of super markets on prices of an essential consumer goods. 10.Find the mean, median and modal ages of married women at first child birth.
Age at the birth 13 of first child : 37 162 343 390 256 433 161 14 15 16 17 18 19

No. of married woman :

Age at the birth of the first child : No. of married woman :

20

2 1 6 5

2 2 8 5

2 3 4 9

2 4 4 6

2 5 4 0

35 5

11.Calculate the coefficient of skewness from the following.

Marks above No. of students : : 0 15 0 10 14 0 20 10 0 3 0 8 0 4 0 8 0 5 0 7 0 6 0 3 0 7 0 1 4 8 0 0

12.Box I contains three defective and seven non-defective balls ,and Box II contains one defective and nine non defective balls. we select a box at random and then draw one ball at random from the box. (a) What is the probability of drawing a non-defective ball? 10

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(b)

What is the probability of drawing a defective ball?

13.In order to make a survey of the buying habits, two markets A and B are chosen at two different parts of a city. 400 women shoppers are chosen at random in market A. Their average weekly expenditure on food is found to be Rs.250 with a standard deviation of Rs.40. The figures are Rs.220 and Rs. 55 respectively in the market B where also 400 women shoppers are chosen at random. Test at 1 % level of significance whether the average weekly food expenditure of the two population of shoppers are equal. 14.Find the correlation between age and playing habits of the following students. Age : 15 16 17 18 19 2 0 No. of students : Regular players : 25 0 20 0 20 0 15 0 15 0 90 12 0 48 10 0 30 8 0 1 2

15.Two products A and B are processed on 3 machines M1, M2 and M3. The processing times per unit, machine availability and profit per unit are given below: Machin Processing Availability e Time(Hours) Product A M1 M2 M3 Profit 2 3 1 Rs. 10 Product B 3 2 1 Rs. 12 (Hours) 1,500 1,500 1,000

Any unutilized time on machine M3 can be given on rental basis to others at an hourly rate of Rs. 1.50. Solve the problem by simplex method to determine the maximum profit.

DE1612
DISTANCE EDUCATION 11

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M.F.C. DEGREE EXAMINATION, MAY 2011. BUSINESS LAW Time : Three hours Maximum : 100 marks SECTION A (5 8 = 40 marks) Answer any FIVE questions. All questions carry equal marks. 1. How an offer is terminated? 2. Parties to a contract must be competent to contract Explain. 3. Define a contract of guarantee. What are its essentials? 4. Define the term goods. unascertained goods. Distinguish between specific goods and

5. Distinguish between General Crossing and Special Crossing. 6. Define Payment in due course. 7. State the procedure of settlement of a life insurance policy. 8. What are the documents used while transporting goods by sea? SECTION B (4 15 = 60 marks) Answer any FOUR questions. All questions carry equal marks. 9. State the circumstance under which a contract may be discharged. 10.Explain briefly the various modes by which an agency is created. 11.What are the duties and rights of an agent and principal? 12.Explain the rights an unpaid seller. 13.Discuss in detail the statutory protection granted to a collecting banker. 14.Explain briefly the various types of fire insurance policies 15.Describe the duties and liabilities of airlines as a carrier of goods.

12

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DE 1613
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M.F.C. DEGREE EXAMINATION, MAY 2011. FINANCIAL MANAGEMENT Time : Three hours Maximum : 100 marks PART A (5 8 = 40 marks) Answer any FIVE questions. 1. Bring out the functions of a financial manager in brief. 2. Narrate the merits of equity share capital over preference capital. 3. Explain the reasons for working capital gap. 4. What are the objectives of budgeting? 5. How do you forecast the need for current assets? 6. Explain Gordon theory of dividend. 7. For X Ltd the following data is available. Particulars EBIT Contributio n Interest Rs. 1,20 0 400 100

The companys sales are expected to decline by 5%, determine the percentage change in EPS. 8. A companys estimated demand for a material during the next year is 2,500 units. Acquisition costs are Rs.400 per order and carrying cost are Rs.50 per unit. The safety stock is set at 25% of the EOQ. The daily usage is 10 units and lead time is 10 days. Determine (a) the EOQ, (b) the safety stock, and (c) the re-order point. PART B (4 15 = 60 marks) 13

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Answer any FOUR questions. 9. What are the various sources of long term capital and explain their purposes. 10.Enumerate the recommendations of Tandon Committee in relation to working capital. 11.Explain any two capital structure theories in brief. 12.Discuss the tools and techniques for achieving the high liquidity Position of the firm. 13.Elucidate various dividend policies that are followed by the Indian companies. 14.The ABC company has the following capital structure on 30th June, 2010 : Ordinary shares (2,00,000 Rs. shares) 40,00,000 10% preference shares 14% debentures Rs. 10,00,000 Rs. 30,00,000 Rs. 80,00,000 The share of the company sells for Rs.20. It is expected that company wilol pay next year a dividend of Rs. 2 per share which will grow at 7% for ever. Assume a 50% tax rate. You are required to : (a) (b) Compute a weighted average cost of capital based on existing capital structure. Compute the new weighted average cost of capital if the company raises an additional Rs.20,00,000 debt by issuing 15% debenture. This would result in increasing the expected dividend to Rs.3 and leave the growth rate unchanged, but the price of share will fall to Rs.15 per share.

15.A limited company is considering two mutually exclusive projects. Both require an initial investment of Rs.50,000 each and have a life of 5 years. The cost of capital of the company is 10% and tax rate is 50%. The depreciation is charged on straight-line method. The estimated net cash inflows (before depreciation and tax) of the two projects are as follows :

14

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Yea r 1 2 3 4 5

Project A Rs. 20,000 22,000 28,000 25,000 30,000

Project B Rs. 30,000 27,000 22,000 25,000 20,000

Which project should be accepted as per payback period and NPV method? Why?

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M.F.C. DEGREE EXAMINATION, MAY 2011. INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT Time : Three hours Maximum : 100 marks PART A (5 8 = 40 marks) Answer any FIVE questions. All questions carry equal marks. 1. Define investment. Explain the objectives of investment. 2. Bring out the characteristics of Government Securities. 3. What are the basic valuation models of bonds? 4. Explain the various approaches to investment analysis. 5. Why is return an important consideration for investment? 6. Write a short note on Random walk theory. 7. List down the advantages of formula plan. 8. Discuss the assumptions of capital asset pricing model. PART B (4 15 = 60 marks) Answer any FOUR questions. All questions carry equal marks. 15

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9. Distinguish between investment, speculation and gambling. 10.Most investors are risk averse. Elaborate. 11.What are the various fundamental valuation models? Explain any four briefly. 12.What is technical analysis? Explain its tools. What are its shortcomings? 13.In what way can the relationship of risk and return be established? 14.Explain the different approaches in portfolio construction. 15.What is CAPM? What are the limitations of CAPM? Also state the differences between systematic and unsystematic risk.

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M.F.C. DEGREE EXAMINATION, MAY 2011. FINANCIAL SERVICES AND INSTITUTIONS Time : Three hours Maximum : 100 marks PART A (5 8 = 40 marks) Answer any FIVE questions. 1. List out any four fund based activities of a Financial Services Company. 2. What are the functions of Private placement of capital issues? 3. What are the special features of an open ended fund? 4. What are the objectives of Credit rating? 5. Explain the concept of Portfolio management. 6. Explain Gilt securities market. 7. Write a brief note on Badla transactions. 8. Explain the role of SBI towards investor protection. PART B (4 15 = 60 marks)

16

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Answer any FOUR questions. 9. Explain the services of Merchant bankers. 10.Discuss the present state of mutual fund in India and outline causes for the slow growth. 11.Discuss the organisation structure and working of CRISIL. 12.What are the services of NBFC to investors? 13.Discuss the role and functions of ICICI. 14.Make a and NSE. comparison between Stock Exchange, OTCEI

15.Explain the role of Investors Association towards Investor Protection.

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M.F.C. DEGREE EXAMINATION, MAY 2011. GLOBAL FINANCIAL MANAGEMENT Time : Three hours Maximum : 100 marks PART A (5 8 = 40 marks) Answer any FIVE questions. 1. Define global financial management. 2. What are the types of global finance? 3. What are the determinants of portfolio investment? 4. State the significance of Global Finance. 5. Write a short note on CAPM. 6. State the importance of Working Capital Management. 7. Define the concept of derivatives. 8. State how the MNCs effectively manage the Exposures.

17

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PART B (4 15 = 60 marks) Answer any FOUR questions. 9. Discuss the functions and achievements of World Bank. 10.Explain the various methods of International Financing Methods. 11.Explain the features of direct investment. 12.Describe the various sources of working capital. 13.Explain the factors influencing exchange rates. 14.Write short notes on : (a) (b) (c) (d) Derivatives Features Swaps Options.

15.Explain the different methods used for managing Transaction Exposures.

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M.F.C. DEGREE EXAMINATION, MAY 2011. TAXATION AND TAX PLANNING Time : Three hours Maximum : 100 marks PART A (5 8 = 40 marks) Answer any FIVE questions. 1. Give ten examples Incomes which are totally exempt from Income Tax. 2. Define the term Perquisite and how are they treated for Income lax purposes. 3. Define Annual Value. I-low is it determined? 4. What are the provisions of law relating to preliminary expenses? 5. What are the provisions of law regarding the clubbing of income of spouse and family members in the income of individual? 18

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6. The following are the particulars of income/loss of Mr. A. You are required to set off losses and carry forward and set off where necessary. Assessment Assessment Year year 2011-12 (Rs.) 2010-11 (Rs.)

Income from salary (Computed) Income from Interest on securities (Gross) Loss from business Short term gain Long-term gain (land)

15,000 5,000 53,000 8,000 21,000

15,000 5,000 15,000

7. Mr. Rajender Singh retired on 31.12.2009 and his pension was fixed at Rs. 3.600 p.m. He got % Hi of the pension commuted for which he received Rs. 1,80,000 from his employer, a Ltd., Co. Find out the taxable amount of commuted value of pension if (a) (b) he gets gratuity and he does not get gratuity

8. Mr. Ashok is the owner of a house which is let out at rent of Rs. 500 p.m. The municipal taxes are equal to 10% of the rent received. Compute the annual value of the house if (a) (b) The municipal taxes are paid by Mr. Ashok and of the municipal taxes are borne by the tenant. PART B (4 15 = 60 marks) Answer any FOUR questions. 9. Mr. X is employed at Hyderahad at a Basic Salary Rs. 25,000 p.m. and he is also getting following allowances : of

S. No. 1. 2. 3. 4. 5. 6.

Particulars Dearness Allowance Lunch Allowance

Amount (Rs.)
2,000 p.m

1,000 p.m

Servant Allowance (He is paying 1,000 p.m. Rs. 1,200 pin. to a servant) Transport Allowance Education Allowance @200 p.m. per child for three children Hostel Allowance to one child 500 p.m DE569 1,000 p.m

19

S. No. 7. 8. 9. 10. 11. 12. 13. 14.

Particulars Conveyance Allowance Overtime Allowance Officiating Allowance Cash allowance Entertainment Allowance Medical allowance City Compensatory Allowance House Rent Allowance

Amount (Rs.) 800 p.m 2,000 p.m 2,000 p.m 1,200 p.m 2,000 p.m 800 p.m 600 p.m 5,000 p.m

He is having a family house at the place of his posting hut he is living in a rented house and is paying a rent of Rs. 7,000 p.m. Find out his Gross salary. 10.Calculate gross information : MRV Annual Value from following

HOUSE A HOUSE B
80,000

80,000 1,00,000 1,20,000 90,000 8,000 (only 50% paid)

FRV Standard Rent Actual Rent Municipal Taxes

1,00,000 70,000 1,20,000 8,000

It is assumed that the houses were let out throughout the year and there was also no unrealized rent. 11.Harikrishnan, a resident individual, submits the following particulars of income for the previous year ending March 31, 2010 : Dividend from REC International Ltd., Rs. 4,800. Dividend declared on 15-52009 by Sundaram Finance Ltd. Rs. 2,700, interest paid on capital borrowed for the purpose of investment in shares of Sundaram Finance Ltd. Rs. 4200, Collection charges in respect of dividend Rs. 50. Winnings from lottery: net amounts Rs. 70,000, Tax deducted at source Rs. 30,000, Winnings from card games : 23,500. Interest on securities issued by the Government Singapore Rs. 20,570. Determine the income chargeable under the head Income from other sources for the assessment year 2010 11. 12.How would you determine the residential status of a Person?

20

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13.Write a detailed note an rebate of tax under section 88 of Income Tax Act 1961. 14.What are the provisions of law relating to preliminary expenses? 15.Explain the provisions of Income Tax Act 1961 regarding carry forward and set off of losses.

21

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