2007 Baba Saheb Bhimrao Ambedkar University Finance and Control M.Com. Finance And Account Trend Analysis FC- 202 May 2007 Question paper
M.Com. Finance And Account Trend Analysis FC- 202 May 2007
Time : Three hours Maximum : 100 marks
SECTION A — (5 ? 8 = 40 marks)
Answer any FIVE of the following.
1. What are conventions regarding financial statements
2. Ram Textiles purchased eight bales of mill shirting from the coats mills on 7.3.2007 at Rs. 8,500 per bale subject to trade discount of 20%. On receipt of goods one bale was found to be damaged. The bale was therefore returned to sellers on 17.3.2007. Give the rulings of the books in which Ram Textiles would enter these transactions and make there in the necessary entries.
3. The following Trial balance has been prepared wrongly. You are asked to prepare the trial balance correctly.
Dr. Cr.
Rs. Rs.
Capital 22,000
Stock 10,000
Debtors 8,000
Creditors 12,000
Machinery 20,000
Cash in hand 2,000
Bank overdraft 14,000
Sales return 8,000
Purchase return 4,000
Misc. expenses 12,000
Sales 44,000
Purchase 26,000
Wages 10,000
Salaries 12,000
Prepaid insurance 200
Bills payable 10,800
Outstanding salaries 1,400
Total 1,08,200 1,08,200
4. Define :
(a) Deferred Revenue Expenditure
(b) Capital and Revenue Receipts.
5. The following is the Balance sheet of a firm.
Rs. Rs.
Share capital 30,000 Fixed Assets 16,500
Creditors 8,000 Cash 1,000
Bills payable 2,000 Book debts 6,000
Provision for tax 3,500 Bills receivables 2,000
Stock 17,500
Prepaid Expenses 500
43,500 43,500
Comment upon the liquidity of the firm.
6. What are the importance of Fund Flow Statements?
7. From the following Balance sheet as on 31st December, you are required to prepare a Cash Flow Statement.
Liabilities 2005 2006 Assets 2005 2006
Rs. Rs. Rs. Rs.
Share capital 1,00,000 1,50,000 Fixed Assets 1,00,000 1,50,000
Profit & Loss A/c 50,000 80,000 Goodwill 50,000 40,000
General Reserve 30,000 40,000 Inventories 50,000 80,000
16% Bonds 50,000 60,000 Debtors 50,000 80,000
Sundry creditors 30,000 40,000 Bills Receivable 10,000 20,000
Expenses o/s 10,000 15,000 Bank 10,000 15,000
2,70,000 3,85,000 2,70,000 3,85,000
8. A machinery was purchased on 1.1.2006 for Rs. 1,20,000 when the retail price index stood at 150. Restate the figure in current rupees on 31.12.2006. When the index stood at 300.
SECTION B — (4 ? 15 = 60 marks)
Answer any FOUR of the following.
9. What are the concepts of Accounting?
10. Distinction between financial accounting and management accounting.
11. On 31st Dec. 2006 the following Trial Balance was extracted from the books of Hari :
Dr. Cr.
Rs. Rs.
Capital — 50,000
Plant and Machinery 80,000 —
Sales — 1,77,000
Purchases 60,000 —
Returns 1,000 750
Opening stocks 30,000 —
Discount 350 800
Bank charges 75 —
Debtors 45,000 —
Creditors — 25,000
Salaries 6,800 —
Wages 10,000 —
Carriage in 750 —
Carriage out 1,200 —
Bad debt provision — 525
Rent, Rates and Taxes 10,000 —
Advertisement 2,000
Cash in hand 900
Cash at bank 6,000
2,54,075 2,54,075
You are asked to prepare the Trading and Profit and Loss A/c for the year ended 31st Dec. 2006 and the Balance sheet as on that date. The following adjustment are required.
(a) Closing stock Rs. 35,000.
(b) Depreciation of plant and machinery at 6%.
(c) Bad debts provision to be adjusted to Rs. 500.
(d) Interest on capital to be allowed at 5% p.a.
(e) 2% of the profits is to be carried to reserve fund.
12. What are the importance and limitations of ratio analysis?
13. The following is the Balance sheet of a company as on 31st March.
Liabilities Rs. Assets Rs.
Share capital 2,00,000 Land and Buildings 1,40,000
Profit and Loss Account 30,000 Plant and Machinery 3,50,000
General Reserve 40,000 Stock 2,00,000
12% Debentures 4,20,000 Sundry Debtors 1,00,000
Sundry creditors 1,00,000 Bills Receivable 10,000
Bills Payable 50,000 Cash in Bank 40,000
8,40,000 8,40,000
Calculate :
(a) Current Ratio
(b) Quick Ratio
(c) Inventory to working capital
(d) Debt to Equity Ratio
(e) Proprietary Ratio
(f) Capital Gearing Ratio
(g) Current Assets to Fixed Asset.
14. The Balance sheets of Anu Industries as on 31st December 2005 and 31st December 2006 are as follows :
Liabilities of Capital 2005 2006 Assets 2005 2006
Rs. Rs. Rs. Rs.
Share capital 5,00,000 7,00,000 Land and Buildings 80,000 1,20,000
Profit and Loss 1,00,000 1,60,000 Plant and Machinery 5,00,000 8,00,000
General Reserve 50,000 70,000 Stock 1,00,000 75,000
Sundry Creditors 1,53,000 1,90,000 Debtors 1,50,000 1,60,000
Bills payable 40,000 50,000 Cash 20,000 20,000
Expenses o/s 7,000 5,000
8,50,000 11,75,000 8,50,000 11,75,000
Additional Information :
(a) Rs. 50,000 depreciation has been charged on Plant and Machinery during 2006.
(b) A piece of Machinery was sold for Rs. 8,000 during the year 2006. It had cost Rs. 12,000 ; depreciation of Rs. 7,000 had been provided in it.
Prepare a schedule of changes in working capital and a statement showing the source and Application of Funds for 2006.
15. The comparative Balance sheet of a company are given below :
Liabilities 2005 2006 Assets 2005 2006
Rs. Rs. Rs. Rs.
Share capital 35,000 37,000 Cash 4,500 3,900
Debentures 6,000 3,000 Book debts 7,450 8,850
Creditors 5,180 5,920 Stocks 24,600 21,350
Provision for Land 10,000 15,000
Doubtful debts 350 400 Goodwill 5,000 2,500
Profit and Loss 5,020 5,280
51,550 51,600 51,550 51,600
Additional information available are
(a) Dividends paid amounted to Rs. 1,750.
(b) Land was purchased for Rs. 5,000 and amount provided for the amortization of goodwill amounted to
Rs. 2,500.
(c) Debentures were repaid to the extent of Rs. 3,000.
You are required to prepare a Cash Flow Statement.
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