M.Com (Semester III) (CBCS) Examination Nov/Dec-2018
MANAGEMENT ACCOUNTING (Compulsory Paper III)
Time: 2½ Hours Max. Marks: 70
Instructions: All questions are compulsory.
Figures to the right indicate full marks.
Use of calculator is allowed.
Q.1 Choose the alternatives given below. 14
The officer who is entrusted with management accounting functions in an
organization is known as
Chartered Accountant Financial Accountant
Management Accountant Cost Accountant
The Ratio Analysis is one of the most useful and common method of
analyzing statement.
Cost Income
Expenditure Financial
Quick Ratio is also known as ratio.
Current Liquid
Working Capital Debt equity
Excess of current assets over current liabilities is called capital.
Working Authorized
Borrowed Owned
Total of paid up capital, reserves and surplus is called
Borrowed capital Net worth
Working capital Owners equity
If sales are Rs. 10,00,000, Gross profit ratio is 20% then cost of goods
sold is Rs.
12,00,000 6,00,000
8,00,000 10,00,000
is a example of balance sheet ratio.
Gross profit ratio Current ratio
Interest coverage ratio Stock turnover ratio
The ideal current ratio is
2:1 1:2
3:1 1:3
ratio is used to evaluate performance.
Liquid Current
Acid test Activity
10) accounting is processes and presents the accounting data for
internal use.
Cost Financial
Management Historical
11) statement reveals changes in working capital.
Financial Changes in working capital
Balance sheet Funds Flow
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12) If there is no bank overdraft in the balance sheet then
Current liabilities and Quick liabilities are same
Current Assets and Quick assets are same
Current liabilities and Current assets are same
None of the above
13) Accounting which provide necessary information to the
management for discharging its functions.
Financial Historical
Single entry Management
14) Gross working capital means
Total Current Liabilities
Current Assets minus Current Liabilities
Total Current Assets
Excess of Current Assets over Current Liabilities
Q.2 Write short answer. 14
Determinants of working capital
Management Accountant
Q.3 The following figures are extracted from the Balance Sheet of Jay Jawan
Ltd. as on 31st December 2009 and 2010.
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Particulars 31-3-2009 31-3-2010
Rs. Rs.
Stock 25,000 40,000
Debtors 10,000 16,000
Cash at Bank 5,000 4,000
Creditors 8,000 15,000
Bills Payable 2,000 3,000
Provision for Taxes 5,000 7,000
Bank Overdraft 5,000 15,000
Calculate the Current Ratio and Acid Test Ratio for the two years.
Ram Cements presents the following information and you are required to
calculate funds from operations.
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Profit and Loss Account
To Operating Expenses 1,00,000 By Gross Profit 2,00,000
To Depreciation 40,000 By Gain on sale of plant 20,000
To Loss on sale of
Building
10,000
To Advertisement
Suspense Account
5,000
To Discount 500
To Discount on issue of
shares written off
500
To Goodwill written off 12,000
To Net Profit 52,000
Total 2,20,000 Total 2,20,000
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Q.4 From the following Balance Sheet, prepare a schedule of changes in working
capital and funds flow statement.
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Balance Sheet
Liabilities 31/3/2016 31/3/2017 Assets 31/3/2016 31/3/2017
Capital 63,000 1,00,000 Cash 15,000 20,000
Long term
loans
50,000 60,000 Debtors 30,000 28,000
Trade Creditors 42,000 39,000 Stock 55,000 72,000
Bank Overdraft 35,000 25,000 Land and Building 80,000 1,00,000
Outstanding
expenses
5,000 6,000 Furniture 15,000 10,000
1,95,000 2,30,000 1,95,000 2,30,000
OR
A Balance Sheet of a firm as on 31-3-2016 and 31-3-2017 are given below 14
Balance Sheet
Liabilities 31/3/2016 31/3/2017 Assets 31/3/2016 31/3/2017
Share Capital 1,00,000 1,60,000
Fixed Assets at
cost
1,52,000 2,00,000
Retained
earnings
70,250 85,300 Inventory 93,400 89,200
Accumulated
Depreciation
60,000 40,000 Debtors 30,800 21,100
12%
Debentures
50,000 Expenses prepaid 3,950 3,000
Creditors 28,000 48,000 Bank 28,100 20,000
3,08,250 3,33,300 3,08,250 3,33,300
The following additional information for the year 2017 is also given.
Net profit Rs. 27,050
Depreciation charged Rs. 10,000
Cash dividend declared during the period Rs. 12,000
An addition to the building was made during the 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.
Q.5 From the following information presented by firm for the year ended 31st
December 2015, prepare Balance Sheet as on 31-3-2015.
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Sales to net worth 5 times
Current liabilities to net worth 50%
Total debt to net worth 60%
Fixed Assets to Net worth 60%
Current Ratio 2
Sales to stock 10 times
Debtors velocity 9 times
Annual Sales Rs. 15,00,000
Cash Sales 40% of sales
OR
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Q.5 Lucky Ltd, a trading company provides the following information. 14
Annual sales during the year Rs. 1,20,000
Analysis of Sales
Materials 60%
Expenses 15%
Profit 25%
Average credit allowed to debtors 2½ months
Average credit period allowed by creditors 1½ months
Raw materials are to remain in store on average 1 month
Processing period on average 2 months
Finished Goods remain in warehouse on average 3 months
Bank overdraft Rs. 90,000
10% of the total working capital (including contingencies) is to be kept in
hand for contingencies.
You are required to determine the working capital requirements of Lucky
Ltd. on the basis of above information.