JAIN INSTITUTE OF BUSINESS MANAGEMENT, KANAKAPURA

PRACTICE PAPER- JUNE 2020

CLASS: VI SEM BCOM
SUBJECT: - MANAGEMENT ACCOUNTING
TIME: 3 Hours MAX MARKS: 70

SECTION-A
Answer any five sub-questions, each sub-question carries two marks. 5x2=10
1. a. State any two objectives of Management Accounting.
b. What is comparative income statement?
c. Give the meaning of ratio analysis.
d. Write any four components of current liabilities.
e. Write any two differences between fund flow statement and cash flow statement.
f. Give the meaning of working capital.
g. How do you calculate Acid test ratio?

SECTION-B
Answer any three questions, each question carries six marks. 3x6=18
2. Explain any six advantages of management accounting.
3. given:
Current ratio 3.5
Liquid ratio 2.5
Working capital Rs. 1,00,000
From the above calculate: (1) Current assets
(2) Current liabilities
(3) Stock
(4) Liquid assets
4. Calculate trend percentage from the following data
Particulars 2016 2017 2018 2019
Sales 1,20,000 1,50,000 1,52,000 2,00,000
Cost of sales 70,000 75,000 80,000 1,00,000
Operating expenses 24,000 30,000 32,000 50,000
Profits 26,000 45,000 40,000 50,000

5. prepare schedule of changes in working capital from the following:

 Particulars 31-3-2018 31-3-2019
Bank O/D 8,000 -
Creditors 40,000 45,000
Bills payable 5,000 8,000
O/S expenses 3,000 5,000
Machinery 50,000 45,000
Debtors 20,000 40,000
Inventories 15,000 25,000
Bills receivable - 5,000
Bank 1,000 8,000
Prepaid rent 2,000 3,000

6. X ltd made a profit of Rs 18,00,000 for the year ended 31st March, 2019 after considering the following:
Depreciation on building 52,000
Depreciation on plant and machinery 35,000
Transfer to general reserve 10,000
Goodwill written off 8,000
Plant and machinery having book value of Rs 14,000 was sold for 10,000
Profit on sale of investments 7,000
The following was the position of current assets and current liabilities of the company as on 31 st March
2013 and 2014.
31st March 2018 31st March 2019
Debtors 45,000 35,000
Stock 72,000 80,000
Cash 12,000 21,000
Creditors 56,000 62,000
Outstanding expenses 7,000 5,000
Prepaid expenses 4,000 5,000
Bills payable 11,000 15,000
Calculate cash flows from operating activities.

SECTION-C
Answer any three questions, each question carries fourteen marks. 3x14=42
7. From the following balance sheet of Bangalore ltd and Mangalore ltd as on 31.03.2019.
Balance sheet

Assets Bangalore ltd Mangalore ltd

Land And Buildings 9,00,000 4,40,000
Plant And Machinery 7,00,000 5,00,000
Investments 1,00,000 60,000
Sundry Debtors 3,40,000 2,80,000
Cash And Bank 1,10,000 40,000
Prepaid expenses 60,000 28,000
22,10,000 13,48,000
Liabilities
Equity Share Capital 6,50,000 3,60,000
Preference Share Capital 3,00,000 2,00,000
Reserves And Surplus 2,50,000 2,40,000
Long Term Loans 9,00,000 5,00,000
Bills payable 60,000 30,000
O/S expenses 10,000 4,000
Creditors 40,000 14,000
22,10,000 13,48,000

You are required to prepare a comparative balance sheet and comment on the financial performance
of the companies.

8. Using following details prepare the balance sheet of ABC Co., Ltd as on 31 March 2019.
a) current ratio 2.75
b) quick ratio 2.25
c) working capital Rs 3,50,000
d) reserves and surplus 1/7 of working capital
e) total current assets included stock, debtors and cash only, which are in the ratio 2:6:3
f) creditors and bills payable are in the ratio of 3:2
g) fixed assets are 50% of share capital
h) share capital is Rs 6,00,000

9. Following are the summarized balance sheets of X ltd as on 31st March 2018 and 2019.
Liabilities 2018 2019 Assets 2018 2019
 Equity Share Capital 2,00,000 2,50,000 Bank 35,000 16,000
12% Debentures 1,00,000 80,000 Stock 40,000 75,000
10%Preference Share Capital 50,000 80,000 Bills Receivables 20,000 50,000
Public Deposits 20,000 30,000 Debtors 70,000 1,00,000
Loans 50,000 80,000 Machinery 75,000 60,000
Reserves 20,000 25,000 Furniture 10,000 8,000
P/L A/C 50,000 60,000 Land 1,70,000 2,80,000
Provision for Depn on Machinery 10,000 15,000 Buildings 1,40,000 99,000
Proposed Dividends 20,000 25,000 Goodwill 30,000 25,000
Creditors 40,000 50,000
Bills Payable 30,000 18,000
Total 5,90,000 7,13,000 Total 5,90,000 7,13,000
Additional information:
a) Depreciation charged during the year was Rs 4,000 on furniture, Rs 12,000 on machinery and Rs
20,000 on buildings.
b) Redemption of debentures was made at a 10% premium.
c) Part of machinery was sold for Rs 15,000 at a loss of Rs 4,000.
d) During the year interim dividend of Rs 10,000 and income tax of Rs 5,000 was paid.
Prepare:
1) Statement of changes in working capital.
2) Funds flow statement.
(Working notes are also required to be shown)
10. Given below are the balance sheets of A & sons. You are required to prepare cash flow statement.
Liabilities 1-1-2014 31-12-2014 Assets 1-1-2014 31-12-2014
Creditors 40,000 44,000 Machinery 80,000 55,000
Mrs. A’s loan 25,000 -- Cash 10,000 7,000
Loan from bank 40,000 50,000 Debtors 30,000 50,000
A’s capital 1,25,000 1,53,000 Stock 35,000 25,000
Land 40,000 50,000
Building 35,000 60,000
2,30,000 2,47,000 2,30,000 2,47,000
a) During the year a machine costing Rs 10,000 (accumulated depreciation there of Rs 3,000) was sold

for Rs 5,000.
 b) The provisions for depreciation against machinery as on 01-01-2014 was Rs 25,000 and on 31-

12-2014 Rs 40,000.
c) Net profit for the year amount to Rs 45,000.

11. (A) From the following calculate funds from operations for the year ending 31st December 2018.
Rs
Profit for the year 1,60,000
Depreciation 90,000
Goodwill written off 20,000
Loss on sale of machinery 10,000
Profit on sales of investment 3,000
Tax provision 2,000
Dividend received 7,000
Preliminary expenses written off 4,000
Transfer to general reserve 30,000
Commission paid on a non-trading activities debited to P/L a/c 10,000
(B) From the following information, calculate:
1. gross profit ratio
2. net profit ratio
3. return on total assets
4. stock turnover ratio
5. working capital turnover ratio
6. debt-equity ratio
Particulars Rs
Sales 25,20,000
Cost of goods sold 19,20,000
Net profit 3,60,000
Stock 8,00,000
Other current assets 7,60,000
Fixed assets 14,40,000
Equity fund 15,00,000
Debt 9,00,000
Current liabilities 6,00,000
______________