Seat No.: ________ Enrolment No.

___________

GUJARAT TECHNOLOGICAL UNIVERSITY

MBA– SEMESTER –I-EXAMINATION – WINTER-2023
Subject Code:1519701 Date: 11-01-2024
Subject Name: Management Accounting
Time:10:30 AM TO 01:30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
4. Use of simple calculators and non-programmable scientific calculators are
permitted.
Q–1 Answer the following in brief. 14
(a) GAAP
(b) Perpetual Vs. Periodic Inventory valuation
(c) Fictitious Assets
(d) Sunk cost
(e) Normal Vs. Abnormal loss
(f) Trend Analysis
(g) Trial Balance

Q – 2 (A) Who are the users of accounting information, and why do the users need accounting 7
information?

Q – 2 (B) Explain the objectives and tools of Financial Statement Analysis. 7

OR

Q – 2 (B) Write a brief note on the IFRS and its need in present business environment. 7

Q – 3 (A) The financial statements of Santa Corporation are as follows. Prepare common-size balance sheet 7
and interpret the same.

PARTICULARS 2014 2013

SHAREHOLDER‟S FUNDS
Share Capital 25,000 25,000
Reserve & Surplus 11,800 8,600
36,800 33,600
LIABILITIES
Secured Loans 9,000 8,000
Unsecured Loans 3,000 1,000
Current Liabilities 23,300 17,100
35,300 26,100
Total equities and liabilities 72,100 59,700
ASSETS
Fixed Assets 32,200 26,500
Investments 2,800 4,300
Inventories 10,600 4,900
Debtors 20,900 15,600
Cash 4,400 7,000
Other current assets 1,200 1,400
Total assets 72,100 59,700

Q – 3 (B) Differentiate between financial, cost and management accounting. 7

OR
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Q – 3 (A) Journalize the following transactions. 7
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
2% 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 8% sales tax and paid cartage Rs. 100 (to be charged from customer)

Q – 3 (B) Elaborate the process and accounting treatment for the change in Depreciation policy. 7

Q – 4 (A) X ltd. purchased a second hand machine on 1 January 2001 for Rs. 37,000 and immediately 7
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. Prepare Machine account for four years.

Q – 4 (B) The following transactions of receipts and issue of item “EXE” took place during 7
September, 2012. Prepare Stock Register Card or Stores Ledger (Perpetual) on
FIFO, and LIFO method of inventory valuation.
September Product K Units Price per unit
3rd Purchase 200 50
6th Purchase 150 56
10th Issue 250 ---
14th Issue 60 ---
20th Purchase 340 58
24th Issue 225 ---

OR
Q – 4 (A) From the Following information, calculate: 7
(i) Break Even point Expressed in terms of sales in Rupees and Units
(ii) Number of units that must be sold to earn a Profit of Rs. 60000 per year.
(iii) If the Sales Price reduced by 10% what will be new P/V Ratio.

Particulars Amount (Rs.)

Sales Price 20 per unit
Variable Manufacturing cost 11 per unit
Variable Selling cost 3 per unit
Fixed Factory overhead 540000 per year
Fixed Administrative Cost 252000 per year

Q – 4 (B) Mr. Raj furnishes the following data relating to the manufacture of product during the month 7
of June 2017.
Raw material consumed Rs. 15000
Direct labour charges Rs. 9000
Machine hours worked 900
Machine hour rate Rs. 5
Administrative overheads 20% on work cost
Selling overheads Rs. 0.50 per unit
Units produced 17100
Units sold 16000 @ Rs. 4 per unit
You are required to prepare i. Cost-sheet ii. Calculate cost per unit.
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Q–5 A product is finally obtained after it passes through three distinct processes. The following information 14
is available from the cost records.
Process I Process II Process III Total
Rs. Rs. Rs. Rs.
Materials 2600 2000 1025 5625
Direct wages 2250 3680 1400 7330
Production overheads --- --- --- 7330
500units @ Rs. 4 per unit were introduced in process I. Production overheads are absorbed as a
percentage of direct wages.
The actual output and normal loss of the respective processes are given below:
Output Normal loss as a percentage of input Value of scrap
(units) (per unit)
Process I 450 10% Rs. 2
Process II 340 20% Rs. 4
Process III 270 25% Rs. 5
Prepare the process accounts and the abnormal gain/ loss accounts.

OR

Q–5 From the following information, prepare balance sheet in as much detail as possible. 14
Paid up share capital = Rs. 50,000/-
Plant & Machinery = Rs. 1,25,000/-
Total Sales = Rs. 5,00,000/-
Sales Return = 20% of Sales
Gross Profit = 25% of Sales
Credit Sales = 80% of Net sales
Current Ratio =2
Inventory turnover = 4 times
Fixed Assets turnover = 2 times
Average Collection Period = 73 days
Bank Credit to Current liability = 70%
Cash to Inventory = 1/5
Total Debt to Current Liability = 3 times
Creditors to Current Liability = 30%

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