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Seat No.: Enrolment
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA SEMESTER 01 • EXAMINATION SUMMER 2017
Subject Code: 2810001 Date: 05/05/2017
Subject Name: Accounting for Managers
Time: 10.30 AM to 1.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q 1
Select the correct answer (one marks each).
1. The words "to balance b/f" or "by balance b/f" are mentioned at the time of posting
of
A. all compounding entries. . all compounding entries. . all compounding entries. . all compounding entries. . all compounding entries. . all compounding entries. . all compounding entries. . all compounding entries. . all compounding entries. B. an opening entry . an opening entry . an opening entry . an opening entry . an opening entry. an opening entry. an opening entry . an opening entry
C. a closing entry . a closing entry . a closing entry . a closing entry . a closing entry . a closing entry . a closing entry . a closing entry D. adjustme . adjustme . adjustme nt entry nt entry
2. Which of the following is cash transaction? 2. Which of the following is cash transaction? 2. Which of the following is cash transaction? 2. Which of the following is cash transaction? 2. Which of the following is cash transaction? 2. Which of the following is cash transaction? 2. Which of the following is cash transaction? 2. Which of the following is cash transaction? 2. Which of the following is cash transaction? 2. Which of the following is cash transaction? 2. Which of the following is cash transaction? 2. Which of the following is cash transaction? 2. Which of the following is cash transaction? 2. Which of the following is cash transaction?
A. sold goods . sold goods . sold goods . sold goods B. sold goods to Ram . sold goods to Ram . sold goods to Ram . sold goods to Ram . sold goods to Ram. sold goods to Ram
C. sold good . sold good . sold good s to Ram on credit D s to Ram on credit Ds to Ram on credit D s to Ram on credit Ds to Ram on credit D s to Ram on credit D . sold goods on Ram's account. . sold goods on Ram's account. . sold goods on Ram's account. . sold goods on Ram's account. . sold goods on Ram's account. . sold goods on Ram's account. . sold goods on Ram's account. . sold goods on Ram's account. . sold goods on Ram's account. . sold goods on Ram's account.
3. Patent right is:Patent right is:Patent right is: Patent right is: Patent right is: Patent right is:
A. personal account . personal account . personal account . personal account . personal account . personal account . personal account B. real account . real account . real account. real account . real account. real account. real account
C. nominal accoun . nominal accoun . nominal accoun . nominal accoun. nominal accoun. nominal accoun t D . expense account . expense account. expense account . expense account . expense account . expense account. expense account. expense account
4. Closing stock appearing in the trial balance is shown on the:Closing stock appearing in the trial balance is shown on the: Closing stock appearing in the trial balance is shown on the: Closing stock appearing in the trial balance is shown on the: Closing stock appearing in the trial balance is shown on the: Closing stock appearing in the trial balance is shown on the:Closing stock appearing in the trial balance is shown on the: Closing stock appearing in the trial balance is shown on the:Closing stock appearing in the trial balance is shown on the: Closing stock appearing in the trial balance is shown on the: Closing stock appearing in the trial balance is shown on the: Closing stock appearing in the trial balance is shown on the: Closing stock appearing in the trial balance is shown on the:Closing stock appearing in the trial balance is shown on the: Closing stock appearing in the trial balance is shown on the:Closing stock appearing in the trial balance is shown on the: Closing stock appearing in the trial balance is shown on the:Closing stock appearing in the trial balance is shown on the: Closing stock appearing in the trial balance is shown on the:
A. credit side of P/L . credit side of P/L . credit side of P/L . credit side of P/L . credit side of P/L . credit side of P/L . credit side of P/L . credit side of P/L . credit side of P/L . credit side of P/L B. expense side of P/L . expense side of P/L. expense side of P/L. expense side of P/L . expense side of P/L . expense side of P/L . expense side of P/L . expense side of P/L. expense side of P/L
C. asset side . asset side . asset side of balance sheet D of balance sheet Dof balance sheet D of balance sheet Dof balance sheet D of balance sheet Dof balance sheet Dof balance sheet D . liability side of balance sheet . liability side of balance sheet. liability side of balance sheet . liability side of balance sheet . liability side of balance sheet. liability side of balance sheet . liability side of balance sheet . liability side of balance sheet. liability side of balance sheet. liability side of balance sheet . liability side of balance sheet. liability side of balance sheet . liability side of balance sheet. liability side of balance sheet. liability side of balance sheet
5. Goodwill is: Goodwill is: Goodwill is: Goodwill is:
A. current asset . current asset . current asset . current asset . current asset . current asset B. fictitious asset . fictitious asset. fictitious asset . fictitious asset . fictitious asset . fictitious asset
C. tangible asset tangible asset tangible asset tangible asset tangible asset tangible asset D. intangible asset . intangible asset. intangible asset . intangible asset . intangible asset. intangible asset. intangible asset. intangible asset
6. Drawings are deducted from: Drawings are deducted from:Drawings are deducted from: Drawings are deducted from:Drawings are deducted from: Drawings are deducted from: Drawings are deducted from: Drawings are deducted from: Drawings are deducted from:Drawings are deducted from: Drawings are deducted from: Drawings are deducted from:
A. sales . sales . sales B. purchases . purchases . purchases . purchases . purchases
C. returns outward . returns outward . returns outward. returns outwards D . capital . capital. capital . capital. capital
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Q 1
Explain the following terms in one or two lines with example. (one marks each)
1. Contingent Liability
2. Fictitious assets
3. An investment Property
4. Non operating income
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Q 1
Discuss the types of accounts and the rules for debit and credit for these accounts.
4
Q 2
Draw the vertical format of Income Statement and Balance Sheet.
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Q 2
Explain any four accounting concepts in brief with example.
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OR
Q 2
Write a short note on IFRS.
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Q 3
Journalize the following transactions.
1. Paid rent for the building Rs. 12,000 half of the building is used by the proprietor the personal use.
2. Paid fire insurance of the above building in advance Rs. 1,000.
3. Paid life insurance premium Rs. 2,000.
4. Charge depreciation on furniture 10% p.a. for one month (furniture Rs. 12,000).
5. Bought goods of the list price of Rs. 1,25,000 from Mohan less 20% trade discount and cash discount and paid 40% by cheque.
6. Sold goods costing Rs. 40,000 to Anil at a profit 20% on sales less 20% trade discount and charged sales tax and paid cartage Rs. 100 (to be charged from customer)
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Q 3
X ltd. purchased a second hand machine on 1 January 2001 for Rs. 37,000 and immediately spent Rs. 2,000 on its repairs and Rs. 1,000 on erection. On 1 July 2002, it purchased another machine for Rs. 10,000 an on 1 July 2003 sold off the first machine purchased on 1 January 2001 for Rs. 28,000. On the same day, it purchased a machine for Rs. 25,000. On 1 July 2004 the second machine purchased for Rs. 10,000 was also sold off at Rs. 2,000. Depreciation was provided on the machine at the rate of 10% on the original cost annually on 31 December. The company follows the year end at December.
OR
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Q 3
A retail shop dealing in knitwear has the following transactions during June 2008.
Date
Purchase/ sales
Units
Rate per unit
June 2
June 8
June 12
June 15
June 18
June 24
June 28
Purchase
Purchase
Sale
Purchase
Sale
Purchase
Sale
1,000
500
500
800
1,000
500
800
50
60
70
70
85
85
100
You are required to compute:
The gross profit earned during June
The value of closing stock by using FIFO, LIFO and Weighted average method.
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Q 3
Ganesh quit his job and started a new business "Woodcraft décor". The transactions for the month of September are as follows:
1. Begun business by investing cash Rs. 10000 in share capital.
2. Paid two months' rent in advance Rs. 2000.
3. Bought equipment for cash Rs. 1200.
4. Bought supplies on credit Rs. 700
5. Received payment for remodeling kitchen Rs. 8600
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6. Paid for advertisement Rs. 1400
7. Received payment for office furnishing Rs. 11200
8. Billed customers for work done other than cash term Rs. 13100
9. Paid wages to assistant Rs. 1500
10. Paid electricity charges Rs.240
11. Received part payment from customer billed on 8th September Rs.4800
12. Paid dividend Rs. 2500
Prepare Trial Balance of the company.
Q 4
Discuss the important aspects of "Accounting Standard 9 Revenue Recognition".
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Q 4
With the following ratios and other information, prepare Trading Profit Loss A/c and Balance Sheet.
Gross Profit Ratio 25% Fixed Assets/ Capital 5/4
Net Profit Sales 20% Fixed Asset/ Total
Stock-turnover Ratio 10 Current Assets 5/7
Net Profit/ Capital 1/5 Fixed Asset Rs. 10 Lakh
Capital to Total Liability 1/2 Closing Stock Rs. 1 Lakh
OR
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Q 4
Explain the importance and tools of Financial Statement Analysis.
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Q 4
From the Balance Sheet as at 31 March 2007 provided to you by M/s Naresh, prepare a statement of changes in working capital and fund flow statement for the year.
Assets 2006 2007
Fixed assets 8,00,000 11,00,000
Less: accumulated depreciation 1,60,000 2,70,000
6,40,000 8,30,000
Investment 1,60,000 6,70,000
Closing stock 4,00,000 4,50,000
Debtors 2,10,000 1,80,000
Cash in hand 10,000 2,000
Bank balance 20,000 8,000
14,40,000 21,40,000
Liabilities
Equity share capital 9,80,000 17,15,000
General reserve 1,00,000 1,50,000
Creditors 3,00,000 2,00,000
Provision for tax 10,000 15,000
Proposed dividend 50,000 60,000
14,40,000 21,40,000
It is also know that machinery costing Rs. 1,00,000 with an accumulated depreciation of Rs. 30,000 was sold for Rs. 60,000.
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Q 5
From the following Trial balance, prepare Trading, Profit Loss account and Balance sheet.
Particulars
Dr.
Cr.
Capital/ Drawing
2,97,300
1,50,000
Plant and machinery
50,000
Sales purchase
15,37,000
19,91,500
Return
4,000
5,000
Wages and salaries
5,000
Creditors/ debtors
2,80,000
1,96,000
Provision for doubtful debt
10,000
Bad debt
3,000
Discount
1,800
1,000
Loose tools
5,000
10% loan from Amirchand
2,00,000
12% loan to Garibchand
2,00,000
Interest on loan from Amirchand
10,000
Interest on loan to Garibchand
12,000
Dividend
1,000
Investments
10,000
Income tax
5,000
Salesman's commission
87,500
Sundry expenses
65,000
Sales tax
5,900
TOTAL
25,66,500
25,66,500
Additional information:
1. Closing stock at market price as at 31/3/12 was Rs. 61,500. However its cost was Rs. 80,000.
2. A machine costing Rs. 20,000 was purchased on 1st July 2011. Wages Rs. 1000 for its erection has been debited to wages account. Provide depreciation on plant and machinery at 10% p.a.
3. Debtors include an amount of Rs. 5,000 due from a customer who became insolvent. Maintain a provision for doubtful debt at 10% and for discount at on debtors. Also create a reserve for discount on creditor at 2%.
4. Dividend accrued and due on investment Rs. 500.
5. Loose Tools were valued at Rs. 4,000.
6. Credit purchase invoice amounting Rs. 4,000 has been omitted from books.
7. Received credit purchase invoice Rs. 6000 on 27 March 12 but the goods were not received till the end of the accounting year.
8. The salesmen were entitled to the commission at on the sales. The sales manager is entitled to commission at on gross profit.
9. Sales include goods worth Rs. 75,000 sent out to Mr. Clever on approval and remaining unsold on 31 March 2012. The cost of the goods was Rs. 50,000.
10. Fire occurred on 23 March 2012 and goods costing Rs. 10,000 (sales price Rs. 15,000) were destroyed. The insurance company accepted the claim for 60% and paid the claim money on 10th April 2012.
11. Investments include shares of X ltd. Purchased for Rs. 3,000 and it was decided to write off this investment as the company is under liquidation.
OR
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Q 5
The following is the trial balance of Shri Om as on 31/03/2002. You are required to prepare Trading Profit Loss Account and Balance Sheet as on 31 March 2002.
Particulars
Dr.
Cr.
Debtors and creditors
5,00,000
2,00,000
Outstanding liability for expenses
55,000
Wages
1,00,000
Carriage outward
1,10,000
Carriage inward
50,000
General expenses
70,000
Cash discount
20,000
Bad debts
10,000
Motor car
2,40,000
Printing and stationary
15,000
Furniture and fittings
1,10,000
Advertisement
85,000
Insurance
45,000
Salesmen's commission
87,500
Postage and telegram
57,500
Salaries
1,60,000
Rates and taxes
25,000
Capital Drawing
20,000
14,43,000
Purchase Sales
15,50,000
19,87,500
Stock on 01.04.2001
2,50,000
Cash at bank
60,000
Cash in hand
10,500
TOTAL
36,30,500
36,30,500
Additional information:
1. Stock on 31st March 2002 was values at Rs. 7,25,000.
2. A provision for doubtful debt to be created at on sundry debtors.
3. Depreciate furniture and fitting by 10% and motor car by 20%.
4. Shri Om had withdrawn goods worth Rs. 25,000 during the year.
5. Sales includes goods worth Rs. 75,000 sent to Shanti Co. on approval and remaining unsold on 31st March 2002. The cost of the goods Rs. 50,000.
6. The salesmen were entitled to a commission of on total sales.
7. Debtors include Rs. 25,000 bad debts.
8. Printing and stationary expenses of Rs. 55,000 relating to 2000-2001 has not been provided in that year but was paid in this year by debiting outstanding liability.
9. Purchase includes purchase of furniture worth Rs. 50,000.
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