M.Com. DEGREE EXAMINATION, APRIL 2016
ADVANCED MANAGEMENT ACCOUNTING
(2012 onwards)
Time 3 Hours Maximum 75 Marks
Section A 3 15)
Answer all questions.
All questions carry equal marks.
1. What are the objectives of management accounting?
2. What are the profitability ratios?
3. What are the types of working capital?
4. State the advantages of Zero-Base Budgeting.
5. State the role of contribution.
Section B 10 50)
Answer all questions choosing either or
All questions carry equal marks.
6. What are the functions of the management
accounting?
Or
Discuss the scope of management accounting.
Sub. Code
611201
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7. State the difference between common size
statement and comparative statement.
Or
The following data represents the ratios pertaining
to X. Co. Ltd. for the year ending 31st March 2010:
Annual Sales 40,00,000
Sales to Net Worth 5 times
Current Liabilities to Net Worth 50%
Total Debts to Net worth 80%
Current Ratio 2.2
Sales to Inventory 8 times
Average Collection Period 40 days
Fixed Assets to Net Worth 70%
From the above motioned particulars, prepare the
Balance Sheet of X co. Ltd. as on 31st March 2010.
Assume that all sales are made on credit.
8. Explain various methods of accounting for price
level changes.
Or
The following details are available from a company.
31-3-06 31-3-07 31-3-0631-3-07
Share Capital 70,000 74,000 Cash 9,000 7,800
Debentures 12,000 6,000 Debtors 14,900 17,700
Reserve for
doubtful debts
700 800 Stock 49,200 42,700
Trade Creditors 10,360 11,840 Land 20,000 30,000
P/L A/c 10,040 10,560 Goodwill 10,000 5,000
1,03,100 1,03,200 1,03,100 1,03,200
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In addition, you are given:
Dividend paid total Rs. 3,500.
Land was purchased for Rs. 10,000.
Amount provided for amortisation of goodwill
Rs. 5,000.
Debentures paid off Rs. 6,000.
Prepare Cash Flow Statement.
9. Mathumetha co. has given the following
particulars. You are required to prepare a cash
budget for the three months ending
31st December 2007:
Months Sales Materials Wages Overheads
August 20,000 10,200 3,800 1,900
September 21,000 10,000 3,800 2,100
October 23,000 9,800 4,000 2,300
November 25,000 10,000 4,200 2,400
December 30,000 10,800 4,500 2,500
Credit terms are:
Debtors: 50% of the credit sales are collected
next month and the balance in the following
month.
Creditors: Materials 2 months
Wages 1 month
Overheads 2
1 month
Cash balance on 1st October, 2007 is expected
to be 8,000.
Advance to be received from sale of vehicle
20,000 in December.
Income tax (advance) to be paid in December
5,000.
Or
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The expenses budgeted for production of 10,000
units in a factory are given below:
Per unit
Material 70
Labour 25
Variable overheads 20
Fixed overheads 1,00,000) 10
Variable overheads (Direct) 5
Adm. Overheads 50,000) 5
Selling Overheads fixed) 13
Distribution Exp. fixed) 7
155
Prepare a budget of the production 8,000 units
6,000 units. Assume that the administration
expenses are rigid for all levels of production.
10. The cost, volume and profit relationship of a
company is described by equation . 3,00,000
0.7 X in which X represents sales and Y
represents total cost. Find out
P.V.Ratio
Break Even Point
Sales volume required to earn a profit of
. 60,000
Sales volume when there is a loss of .30,000.
Or
There are two similar factories under the same
management. The management desires to merge
these two plants. The following particulars are
available.
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Factory I Factory II
Capacity operation 100% 60%
Sales 300 Lakhs 120 Lakhs
Variable costs 200 Lakhs 90 Lakhs
Fixed costs 40 Lakhs 20 Lakhs
You are required to calculate:
What would be the capacity of the merged
plant to be operated for the purpose of breakeven?
What would be the profitability on working at
75% of the merged capacity?
Section C 10 10)
Compulsory question.
11. Following are the comparative Balance Sheets of Good
Luck Co. as at 31st March.
Liabilities 2006 2007 Assets 2006 2007
Share capital
Debentures
10,00,000
5,00,000
11,00,000
3,00,000
Good will
Land Build
50,000
4,20,000
40,000
6,60,000
General reserve 2,00,000 2,00,000Plant 6,00,000 8,00,000
Profit Loss 1,10,000 1,90,000Stocks 2,50,000 2,10,000
Income tax prov 40,000 1,10,000Debtors 3,00,000 2,40,000
Creditors 50,000 40,000Cash 3,00,000 24,000
Bills payable 20,000 30,000Preliminary
Expenses 30,000 20,000
Provision for
Doubtful debts 30,000 24,000
19,50,000 19,94,000 19,50,000 19,94,000
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Additional Information
Dividend for 1,00,000 was paid during the year
ended 31st March 2006.
Depreciation for the year 2006-07 was provided as
follows;
Land and Building 10,000
Plant and machinery 50,000
Income tax 50,000 was paid during the year 2007.
You are required to prepare
A Schedule of change in working capital and
A Statement showing the sources and
Application of Funds.