Master of Commerce (M.Com.) Semester—III Examination
ADVANCED MANAGEMENT ACCOUNTING Compulsory Paper—1 Time : Three Hours] [Maximum Marks : 80 N.B. :— (1) Solve any five questions, one question should be from each section. (2) All questions carry equal marks. SECTION—A 1. Discuss the importance of management accounting in the present scenario and explain the various tools of Management Accounting. 16 2. What are the characteristics of Financial Statement ? State the different stages of preparation of financial statement. 16 3. What do you mean by Management Information System (MIS) ? Explain its relation with management accounting. 16 SECTION—B 4. A Co. Ltd. Manufactures Machine which has a variable cost structure as follows : Material Rs. 40 Labour Rs. 10 Overheads Rs. 4 Selling Price Rs. 90 Sales during the current year are expected to be Rs. 13,50,000 and fixed overheads Rs. 1,40,000 under the wage agreement on increase of 10% is payable to all direct workers from the beginning of the forthcoming year. While material costs are expected to increase by variable overhead cost by 5% and fixed overhead costs by 3%. You are required by calculate : (i) The new selling price if the current profit volume ratio is to be maintained and (ii) The quantity to be sold during the forth coming year to yield the same amount of profit as that of the current year assuming the selling price to remain of Rs. 90. 16
NXO—11542 1 (Contd.) 5. From the following information of Sanjay Company. Prepare the proforma Balance Sheet : Sales are Rs. 32,00,000 Sales to Net Worth 2.3 times Current debt to Net Worth 42% Total debt to Net Worth 75% Current Ratio 2.9 times Net sales to inventory 4.7 times Average collection period (assume 360 days in a year) 64 days Fixed assets to Net Worth 53.2% 16 6. From the following information extracted from the books of P.Ltd., prepare statement of changes in financial position in proper form : Balance Sheet Liabilities 31.3.2013 31.3.2014 Assets 31.3.2013 31.3.2014 Rs. Rs. Rs. Rs. Equity Share Capital 3,00,000 3,50,000 Fixed Assets 5,10,000 6,20,000 Preference Share Capital 2,00,000 1,00,000 Investment (long term) 30,000 80,000 Debentures 1,00,000 2,00,000 Current Assets 2,40,000 3,75,000 Reserve and Surplus 1,10,000 2,70,000 Discount on Issue Provision for Doubtful of Debentures 10,000 5,000 Debts 10,000 15,000 Current liabilities 70,000 1,45,000 7,90,000 10,80,000 7,90,000 10,80,000 Additional Information : (1) A machine costing Rs. 70,000, book value Rs. 40,000 was sold for Rs. 25,000. (2) A dividend of 15% was paid on equity shares during the current year. (3) The provision for depreciation stood at Rs. 1,50,000 on 31.3.2010 and Rs. 1,90,000 on 31.3.2011. (4) Preference shares were redeemed at a premium of 5%. (5) Stock which was valued at Rs. 90,000 in 2013-14 was written up to cost Rs. 1,00,000 for preparing the Profit & Loss A/c of 2013-14. (6) Debtors are likely to be realised in full. 16
NXO—11542 2 NKT/KS/17/4009 7. Prepare Cash Flow Statement of a corporation from the following information : Balance Sheet as on 1st January and 31st December 2014 1st January 31st Dec. 2014 Current Assets : Cash and Bank 40,000 44,400 Account Receivable 10,000 20,700 Inventories 15,000 15,000 Land 4,000 4,000 Business Premises 20,000 16,000 Plant and Equipment 15,000 17,000 Accumulated Depreciation (5,000) (2,800) Patents and Trade Marks 1,000 900 1,00,000 1,15,200 Current Liabilities : Current Liabilities 30,000 32,000 Bonds Payable 22,000 22,000 Bonds Payable Discount (2,000) (1,800) Capital Stock 35,000 43,500 Retained Earning 15,000 19,500 1,00,000 1,15,200 Additional Information : (a) Income for the period was Rs. 10,000. (b) A building that cost Rs. 4,000 and which had a book value of Rs. 1,000 was sold for Rs. 1,400. (c) The depreciation charges for the period was Rs. 800. (d) There was a Rs. 5,000 issue of capital stock. (e) Cash dividend of Rs. 2,000 and a stock dividend for Rs. 3,500 were declared. 16
NXO—11542 3 NKT/KS/17/4009 8. Prepare a Cash Budget for the three months ending 30th June, 2015 from the information given below : (a) Month Sales Materials Wages Overheads Rs. Rs. Rs. Rs. February 14,000 9,600 3,000 1,700 March 15,000 9,000 3,000 1,900 April 16,000 9,200 3,200 2,000 May 17,000 10,000 3,600 2,200 June 18,000 10,400 4,000 2,300 (b) Credit terms are — Sales/Debtor — 10% sales on are cash, 50% of the credit sales are collected next month and the balance in the following month : Creditors — Materials — 2 months — Wages ¼ month — Overheads ½ month (c) Cash and Bank Balance on 1st April 2015 is expected to be Rs. 6,000. (d) Other relevant information is : (i) Plant & Machinery will be installed in February 2015 at a cost of Rs. 96,000. The monthly instalments of Rs. 2,000 is payable from April onwards. (ii) Dividend @ 5% on preference share capital of Rs. 2,00,000 will be paid on 1st June. (iii) Advance to be received for sale of vehicles Rs. 9,000 in June. (iv) Dividends from investments amounting to Rs. 1,000 are expected to be received in June. (v) Income tax (advance) to be paid in June is Rs. 2,000. 16
NXO—11542 4 NKT/KS/17/4009 NKT/KS/17/4009
Master of Commerce (M.Com.) Semester—III Examination
ADVANCED MANAGEMENT ACCOUNTING
Compulsory Paper—1
Time : Three Hours] [Maximum Marks : 80
N.B. :— (1) Solve any five questions, one question should be from each section.
