DISTRICT RESOURCE CENTRE

MAHBUBNAGAR
, PRE-FINAL EXAMINATIONS - JAN / FEB -2011
MANAGEMENT ACCOUNTING & CONTROL
Paper Code: 306 (Elective- III) paper – 2
(B.Com computers & computer application and vocational)

Time: 3 hours Max. Marks: 70

Answer any 5 questions. Answer to The theory question should not exceed 20 lines each.

1. Management information system?

2. Limitations of Financial statements analysis?
3. The operating profit of “X” Ltd affer charging interest and Tax is Rs. 100000. The amount of
interest charged is Rs 20,000 and calculate Interest Coverage ratio.
4. From the following Balance sheet of a company prepares a statement showing the changes in
working capital.

31 st Decembr
Particulars 2009 2010
Assets
Cash 3,000 4,700
Accounts Receivable 12,000 11,500
Stock 8,000 9,000

28,000 31,800

Liabilities
Accounts payments 7,000 4,500
Capital 20,000 25,000
Retrained Earnings 1,000 2,300
28,000 31,800

5. From the following particulars; prepare a production budget of a company for the year ended 31 st
December 2010.

Product Sale(units)as Estimated Stock (units )

per sales
budget
1st January 2010 31st December 2010
X 1, 50,000 14, 000 15 000

Y 1,00, 000 5,000 14,500

Z 70,000 8,000 8,000

1
 6. Form the following information, prepare a Comparative Income statement.

Year 2009 year2010 (in rupees)

Sales 4, 00,000 5, 00,000
CGS 2, 00,000 3, 00,000
Operating Expenses 70,000 1, 00, 000
Other Income 10,000 20,000
Income Tax 70,000 60,000

7. Budget manual?

8 Personal Qualities of Management Accountant?

PART – B

Answer all questions. Answer to The theory question should not exceed 4 pages each.

9 Explain the meaning of management Accounting and state the objectives of

Management Accounting?
(OR)
What are the duties and responsibilities of Management Accountant?

10 The following Balance sheets are given

Liabilities 2009 2010 Assets 2009 2010

(Rs) (Rs) (Rs) (Rs)

Equity share capital 30,000 40,000 Good will 11,500 9,000

Preference share capital 15,000 10,000 Land &buildings 20,000 17,000
General Reserve 4,000 7,000 Plant 8,000 20,000
P&L A/C 3,000 4,800 Debtors 16,000 20,000
Proposed Dividend 4,200 5,000 Stock 7,700 10,900
Creditors 5,500 8,300 Bills Receivables 2,000 3,000
Bills payables 2,000 1,600 Cash in hand 1,500 1,000
Provision for taxation 4,000 5,000 Cash at bank 1,000 8,000
67,000 81,700 67,700 81,700

You are required to prepare a Common size Balance sheet and comment on significant changes that have
been taken place during the year 2010.
(OR)
Form the following information; prepare Income statement one interpret the results of operations using
trend ratios.
Particulars 2006 2007 2008 2009 2010
Sales 250 200 300 400 500
CGS 150 125 150 200 325
Operating expenses 25 20 50 100 125
2
 Interest 5 5 20 25 25
Tax 35 25 40 30 30

11 With the following ratios further information given below prepare a Trading, profit and loss Account
and balance sheet.
Gross profit ratio 25%
Net profit Ratio 20%
Stock Turnover ratio 10
Netprofit / Capital 1/5
Capital to total Liabilities 1/2
Fixed Assets/ Capital 5/4
Fixed assets / total current Assets 5/7
Fixed Assets Rs. 10, 00,000
Closing stock Rs. 1, 00,000

(OR)

Alpha Manufacturing Co. has drawn up the profit & loss A/c for the year ended 31st December 2010.

Particulars Rs. Particulars Rs.

To Opening Stock 26,000 By Sales 1,60,000
To Purchases 80,000 By Closing Stock 38,000
To Wages 24,000
To Manufacturing Expenses 16,000
To Gross Profit 52,000
1,98,000 1,98,000

To Selling & Distribution Expenses 4,000 52,000

To Administration Expenses 22,800 By Gross profit 4,800
To General Expenses 1,200 By Compensation for acquit ion of Land
To Value of furniture loss by fire 800
To Net profit 28,000
56,800 56,000

You are required to find out

A) Gross Profit Ratio
B) Net profit Ratio
C) Operating profit Ratio
D) Operating Ratio

12 From the following Comparative Balance Sheets you are required to prepare.
a. A Schedule of changes in Working Capital
3
 b. A Statement Showing the Sources and Application of funds.

Liabilities 2009 2010 Assets 2009 2010

Share Capital 1,00,000 1,10,000 Good will 50,000 4,000
Debentures 50,000 30,000 Land 42,000 66,000
General reserves 20,000 20,000 Plant &machinery 60,000 80,000
Profit & Loss A/c 11,000 19,000 Stock 25,000 21,000
Tax Provisions 4,000 11,000 Debtors 30,000 24,000
Creditors 5,000 4,000 Cash 30,000 2,400
Bills payable 2,000 3,000 Preliminary Expenses 3,000 2,000
Provisions for Bad debts 3,000 2,400
1,95,000 1,99,400 1,95,000 1,99,400

Additional Information

i) During the year 2010 part of machinery costing Rs. 750/- (accumulated depreciation
there on being Rs. 250/-) was sold for Rs.300/-
ii) Dividend for Rs. 10,000 was paid during the year ended.
iii) Income tax Rs 5,000 was paid during the 31st march 2010
iv) Depreciation for the year 2010 was provided as follows.
Land & Buildings Rs. 1000
Plant and Machinery Rs. 5000

(OR)
Given below are the balance sheets of Vijay& Bro’s.

Liabilities 31st December 31st Assets 31st 31st

2009 December December December
2010 2009 2010
Creditors 40,000 44,000 Cash 10,000 7,000
Mrs Vijay’s loan 25,000 - Debtors 30,000 50,000
Loans form Bank 40,000 50,000 Stock 35,000 25,000
Capital 1,25,000 1,53,000 Machinery 80,000 55,000
Land 40,000 50,000
Building 35,000 60,000

2,30,000 2,47,000 2,30,000 2,47,000

During the year a machine costing Rs. 10,000(Accumulated depreciation Rs.3000) sold for Rs.5,000
The provision for depreciation against machinery as on 1st January 2010 was Rs. 25,000 and on 31st
December 2010 Rs. 40,000, net profit for the year amount to Rs. 45,000. You are required to prepare
cash flow Statement.
13 A company is expected to have Rs. 25000 Cash in hand on 1st April 2010and it requires you to
prepare Cash budget for the three months April to June 2010. The following Information is supplied
to you.
4
Months Sales(Rs) Purchases (Rs) Wages(Rs) Expenses (Rs)
February 70,000 40,000 8,000 6,000
March 80,000 50,000 8,000 7,000
April 92,000 52,000 9,000 7,000
May 1,00,000 60,000 10,000 8,000
June 1,20,000 55,000 12,000 9,000

Other Information

a) Period of credit allowed by suppliers is two months

b) 25% of sale is for cash and the period of credit allowed to customers for credit
sale is one month.
c) Delay in payment of wages and expenses one month.
d) Income tax Rs. 25,000 is to be paid in June 2010.

(OR)

The expenses for the budgeted production of 10,000 units in a factory are furnished below.

Per unit (Rs)

Material 65
Labour 30
Variable over heads 15
Fixed over heads (Rs.1, 00,000) 10
Variable expenses (Direct) 15
Selling Expenses (10%fixed) 6
Distribution expenses (20% Fixed) 4
Administration expenses (Rs. 50,000) 5
(100% fixed)
-------------
Total cost per Unit 150
--------------

Prepare a Flexible Budget for production of

a) 6,000 Units b) 7,500 units c) Indicate cost per unit at both the levels.