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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI 600 034
P.G. DEGREE EXAMINATION COMPUTER APPLICATIONS& COMMERCE
THIRDSEMESTER APRIL 2018
16PCA3MC03/CO 3902 PRINCIPLES OF MANAGEMENT ACCOUNTING
Date: 05-05-2018 Dept. No. Max. 100 Marks
Time: 01:00-04:00
SECTION A
ANSWER ALL THE QUESTIONS (10 X 2 20)
1. What is pay-back period?
2. State any two benefits of Management Accounting.
3. What is meant by working capital?
4. What is Return on Capital Employed?
5. List out any two applications of fund.
6. Find out fixed assets and gross profit from the following information:
Sales Rs.5,00,000; Gross Profit Ratio 25%
Fixed assets turnover ratio (on cost of sales) 5 times
7. A project costs Rs.4,50,000 and yields annual profits of s.75,000,Rs.78,000,Rs.82,000 Rs.90,000 Rs.95,000 Rs.105,000. Calculate its pay-back period.
8. The following budget estimates are available from a factory working at 60% of its capacity. Variable expenses Rs.40,000; Semi variable expenses Rs.15,000 Fixed)
Fixed expenses Rs.8,000. Prepare a budget for 75% of the capacity.
9. Prepare a production budget from the following information:
Products
Estimated stock on 1.9.2015 (units)
Estimated sales during September to March 2015 (units)
Desired closing stock on 31.12.2015 (units)
R
S
U
P
3,000
4,000
5,000
4,000
12,000
16,000
14,000
13,000
4,000
5,000
4,000
3,000
10. Calculate the value of furniture purchased from the following details:
Opening balance Rs. 2,00,000
Closing balance Rs. 3,00,000
Depreciation charged Rs. 40,000
SECTION B
ANSWER ANY FOUR QUESTIONS x 10 40)
11. What are the differences between Cost Accounting and Management Accounting?
12. What are importance of cash flow statement?
13. Briefly explain the different methods of budgeting.
14. From the following Balance Sheet, calculate:
Current Ratio
Liquid Ratio
Debt-Equity Ratio
2
Proprietary Ratio
Balance Sheet of Exe Ltd. As on 31-12-2012
Liabilities
Rs.
Assets
Rs.
Share Capital
Reserve
debentures
Bank overdraft
Creditors
5,00,000
3,00,000
11,00,000
1,00,000
2,00,000
Fixed Assets
Stock
Debtors
Cash
14,00,000
5,00,000
2,00,000
1,00,000
22,00,000
22,00,000
15. Prepare a schedule of changes in working capital from the balance sheet given below:
BALANCE SHEET
Liabilities
2006
2007(Rs.)
Assets
2006(Rs.)
2007(Rs.)
Share capital
50,000
70,000
Building
8,000
12,000
General Reserve
5,000
7,000
Stock
10,000
8,000
Profit loss A/c
10,000
16,000
Debtors
12,000
16,000
Sundry Creditors
16,000
19,000
Cash
5,000
9,000
Bills payable
4,000
3,000
Machinery
50,000
70,000
Total
85,000
1,15,000
Total
85,000
1,15,000
16. Prepare flexible budget for production of 80% and 100% level on the basis of the following information.
Production at 50% capacity 5,000 units
Raw Materials
Rs.70 per unit
Direct Labour
Rs.40 per unit
Direct expenses
Rs.25 per unit
Factory Expenses
Rs.60,000 Fixed)
Administration Expenses
Rs.40,000 Fixed)
17. The sales and profit for 2014 and 2015 are as follows:
Year
Sales Rs.
Profit Rs.
2016
1,20,000
25,000
2017
1,40,000
30,000
Find out:
P/V Ratio
BEP
Sales for a profit of Rs.60,000
Profit for sales of Rs.1,80,000 and
Margin of Safety at a profit of Rs.40,000.
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SECTION C
ANSWER ANY TWO QUESTIONS x 20= 40)
18. The expenses for the production of 5,000 units in a factory are given as follow:
Details
Per Unit(Rs.)
Materials
Labour
Variable Overheads
Fixed Overheads (Rs.50,000)
Administrative expenses variable)
Selling expenses fixed)
Distribution expenses fixed)
40
25
15
10
10
5
5
Total Cost Per Unit
110
You are required to prepare a budget for the production of 7,000 units.
19. The following are the summarized P L A/C of Priya Ltd., for the year ending 31.12.2016 and Balance Sheet as on that date:
Dr. Profit and Loss Account Cr.
Particulars
Rs.
Particulars
Rs.
To Opening Stock
To Purchases
To Incidental expenses
To Gross Profit
49,750
2,72,625
7,125
1,70,000
By Sales
By Closing Stock
4,25,000
74,500
Total
4,99,500
Total
4,99,500
To Administrative expenses
To Selling Distribution expenses
To Other operating expenses
To Loss on sale of assets
To Net Profit
75,000
15,000
7,500
2,000
75,000
By Gross Profit
By Interest
By Profit on sale of shares
1,70,000
1,500
3,000
Total
1,74,500
Total
1,74,500
Balance Sheet
Liabilities
Rs.
Assets
Rs.
Issued capital:
2000 shares of Rs.50 each
1,00,000
Land and Building
75,000
Reserves
45,000
Plant and Machinery
40,000
Current Liabilities
65,000
Stock
74,500
Profit and Loss Account
30,000
Debtors
35,500
Cash at bank
15,000
Total
2,40,000
Total
2,40,000
From the above you are required to calculate the following:
Current ratio
ii) Operating cost ratio
iii) Return on net worth
iv) Expenses ratio
Stock turnover ratio
20. Pandian Ltd. requests you to assess the causes for its Growing Bank overdraft in spite of profitable working. The following are their Balance Sheets for the years 2014 and 2015:
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Balance Sheet
Liabilities
2014(Rs.)
2015(Rs.)
Assets
2014(Rs.)
2015(Rs.)
Share Capital
3,00,000
3,20,000
Land
50,000
80,000
P L A/C
50,000
1,60,000
Buildings (at cost)
1,50,000
2,90,000
Current liabilities
60,000
80,000
Machinery (at cost)
2,00,000
2,10,000
Bank Overdraft
30,000
2,40,000
Stock
1,00,000
2,50,000
Proposed dividend
1,50,000
1,80,000
Debtors
90,000
1,50,000
Total
5,90,000
9,80,000
Total
5,90,000
9,80,000
Additional information:
During the year 2015, a machine costing Rs.40,000, was sold for Rs.25,000.
In April 2015, the dividend proposed in 2014 was paid.
21. A firm expects to have Rs.24, 000 on 1st May 2017 and requires you to prepare an estimate of the cash position during the 3 months May to July 2017. The following information is supplied to you.
Months
Sales

Purchases
Wages

Factory Exp.
Office Exp.
Selling Exp.
March
44,000
25,000
6,000
3,000
5,000
3,000
April
50,000
26,000
6,500
3,500
5,000
3,500
May
54,000
33,000
6,500
4,000
5,000
3,500
June
74,000
36,000
7,000
4,400
5,000
4,000
July
87,000
39,000
7,250
4,250
5,000
4,000
Other information:
i. 50% of the sale is for cash, remaining amounts is collected in the month following that of sale.
ii. Suppliers supply goods on two months credit.
iii. Delay in payment of wages and all other expenses One month
iv. Preference share dividend of 10% on Rs.80,000 is to be paid on May.