MCA (Revised)
Term-End Enamination
Jur€, 2OO7
MCS-035 : AGCOUNTING AND FINANCIALMANAGEMENT
Time : 3 hours Maximum Marks : 700
(Weightage 750/o)
Note' ?;:::'i,!;"#!,,i' i,: :::,:isory
Attempt anv
1. (a) From the following Trial Balance of Mr. Dev and
other information, prepare Trading and Profit and
Loss account for the year ending 31tt December
2005 and Balance sheet as on that date : 30
Trial Balance of Mr. Dev as on 31tt Dec 2005
ParticularsDr.
Amount(Rs.)
Cr.Amount
(Rs.)
Cash at Bank
Purchase A/c
Sales A/e
Returns'lnward
3 , 1 7 0
40,675
680
98,780
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ParticularsAmount
(Rs.)Amount
(Rs.)
Returns Outward
Wages
Power and fuel
Carriage outward
Carriage inward
Stock (1.1.2005)
Land and Building
Machinery
Patents
Salaries
Insurance
Drawings
Capital
Debtors andCreditors
10,480
4,730
3,200
2,040
5,7 60
40,000
20,000
7,500
18,000
600
5,245
-
14,500
500
7 L,000
6,300
1,7 6,580 L,7 6,580
Following adjustments are to be made :
(i) Write off Machinery by \00/o and Patents
20o/o.
(ii) Salaries for the month of March unpaid
Rs. 1,500.
(iii) Unexpired insurance Rs. 85.
(iv) Make a provision for doubtful debts @ 5o/o.
by
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F*,(v) Provide 'interest on capital Rs. 5,000.
'
(vi) Commission due for the work done but not
received Rs. 5,000
(vii) Wages include a sum of Rs. 2,000 spent on
erection of a cycle stand for employees.
(viii) Value of stock as on 31.L2.2AA5 was
Rs. 6,800.
Explain the following with example :
(i) Accrual concept
(ii) Consistency concept
(iii) Conservatism
(iv) Materiality concept
"Operations provide funds. " Comment. Name all the
internal and extemal sources of funds.
The following data has been extracted from the
annual accounts of a company :(Rs. in Lakhs)
(i) Share capital (20,00,000
E' shares of Rs' 10 each) : 2oo'oo
(ii) General Res eve : 150.00
(iii) Investment Allowance Reserve : 50.00
(iv) I5o/o long term loan : 300'00
(v) Profit betore tax : 140.00
(vi) Provision for Taxation : 84'00
(vii) Proposed dMdends : 10.00
Calculate' (i) Return on capital empl yed,
(ii) Return on net worth.
(b) 7 0
1 0
7 0
t
2. (a)
(b)
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3. (a) What are the different types of financial ratios ?
Explain the importance of liquidity ratios. 10
(b) A company can invest Rs. 10,000 in a project :i
having a life of three years. The cash flows of the
project are as follows : 10'
Year Rs.
1 4,000
2 5.000
3 4,000
The cost of capital is too/o P.A. Should the
investment be made ? (Justify your answer)
4. (a) What do you understand by "Financial iManagement" ? Discuss the main tasks and n
responsibilities of a financial manager. 70
(b) Explain the various steps involved in the process of
credit evaluation. to,
5. (a) Explain the concept of 'working capital'. What
factors determine the quantum of working capital ? 10
(b) A manufacturing company will require 50,000 units
of a product during the nexi year. The cost of
processing an order is Rs. 20 and the carrying cost
per unit is 50 paise per year. Lead time of an order
is 5 days and the company will keep a safety stock
of two days usage. (Assume 250 days in a year) r.Calculate (1) EOQ (2) Re-order period (3) Minimum ',1
inventory (4) Maximum inventory, and (5) Average
inventory. 10
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6. Explain the following giving examples :
(i) Net Current Assets forecasting method
(ii) Baumol's model
(iii) VED Analysis
(iv) Accounting Equation
20
MCS-035 12,000
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MCS-035@
MCA (Revised)
Term-End Examination
June, 2OA7
MCS-035@ : ACCOUNTING ANDFINANCIAL MANAGEMENT
Time : 3 hours Mqximum Marks : 700
(Weishtage 750/o)
Nofe r Qu estion number 1 fs compulsory. Attempt anythree questions from the rest.
1. (a) Prepare Trading Account and Profit and Loss A/c
of Mr. Sanyam and Balance Sheet from the
following balances extracted from books for the
year ending 31tt March 2006 : Zs
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Trial Balance of Mr. Sanyam as on
31"t March, 2006
Dr. Cr.
Amount(Rs.)
18,750
150
45
15,000
2,000
2,000
Particulars
Cash Account
Bank Account
Machinery Account
Furniture A/c
Stock (L-4-2005)
Purchase A/c
Discount Allowed
Repair A/c
Cartage A/c
Municipal Taxes
Advertising A/c
Rent A/c
Salaries
Bad debts A/c
Capital
Bad debts recovered A/c
Discount Received
Sales
Loan @ LZVo p.a.
Shyam Bros.
L,524
L7,425
10,000
900. 4,000
2,750
50
1.00
50
100
100
150
300
500
MCS-ffis @
37,945
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L - " .
2.",ir r
Following adjustments are to be made :
(i) Salaries Outstanding Rs. 20[ Prepaid Rent
Rs. 50.
(ii) Provide depreciation on machinery at l0o/o;
write off furniture by 20Vo.
(iii) Interest on loan has been due for one year and
remained unpaid.
(iv) Write off Rs. 400 which are not to be paid to
Shyam Bros.
(v) Provide interest on capital @ 60/o p.a. for full
yeat.
(vi) Value of closing stock on 31.3.2006 was
Rs. 8,000.
(b) The Balance Sheets of a Petro Company for tl.re
years L999 and 2000 are as follows :
1999 2000
Assets
Cash Balances 50,000 60,000
Plant & Machinery 2,00,000 2,50,000
(-) Depreciation 60,000 80,000
Land 1,00,000 80,000
Inventory 1,40,000 L,20,000
Trade Debtors 75,000 1,00,000
1 5
P.T.O.MCS-M5 @
5,05,000 5,30,000
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1999 2000
Liabilities
Share Capital 2,00,000 2,40,000
Trade Creditors 30,000 40,000-
Debtors 1,50,000 90,000
Retained Earnings I,25,000 1,60,000
5,05,000 5,30,000
Cash dividend of Rs. 25,000 has been paid during
the year. You are required to prepare cash flow
statement following the indirect method.
2. Wha[ is working capital and what factors affect the sizeof
working capital in an enterprise. Also explain the various
strategies of working capital management. 20
3. (a) From the following information calculate : 70
(i) Current ratio
(ii) Liquidity ratio
(iii) Debt-equity ratio
(iv) Proprietory ratio
(v) Solvency ratio
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Paid-up capital 1,00,000
Reserve,/Surplus 84,500
Debentures 1,00,000
Bills Payable 6,500
Fixed Assets 2,!9,810(- Depreciation)
Stock 49,460
Trade debtors 11,7 L0
Cash at Bank 26,020
(b) How is temporary cash surplus managed ? 10
4. What is treasury managernent ? What are the main
functions and focus areas of the Treasury Department ? 20
5. (a) What benefits and costs are associated with the
extension of credit ? How should they be combined
1 0to obtain an appropriate credit policy ?
(b) XYZ Ltd. is implementing a project with an initial
capital outlay of Rs. 7 ,600. Its cash inflows are as
follows : 10
Year Rs.
1 6,000
2 2,000
3 1,000
4 5,000
The expected rate of return on the capital invested
is !2o/o p.a.'Calculate the discounted payback period
of the project.
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6. Write short notes on the following :
(a) Factoring
(b) Baumol's rnodel
(c) Accrual concept
(d) Economic Order Quantity
MCS-ffis @ 6
20
3,000
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MCA (Revised)
Term-End Examination
December, 2OO7
MCS-035 : ACCOUNTING AND FINANGIALMANAGEMENT
T'ime : 3 hours Maximum Marks : 700
(Weishtage 7 5o/o)
N "e' Y,"i #:,^w l;l I#!;:'7 "::l'::' ;";l. (a) Prepare Trading and Profit & Loss Account for the
year ended 31tt March 2006 and Balance Sheet as
on that date from the following Trial Balance and
other information : 30
ParticularsDr
Amount(Rs.)
CrAmount
(Rs.)
Capital
[:urniture
Purchases
f)ebtors
20,000
1,50 ,000
2,00,000
1,00,000
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ParticularsDr
Amount(Rs.)
CrAmount
(Rs.)
Interest earned i
Salaries
Sales
Purchase return
Wages
Rent
Bad debts written off
Credit
Drawings
Provision fordebts
Printing and
Insurance
bad
Station ery
Opening Stock
Office expenses
Provision forDepreciation
Sales Return
30,000
20,000
15,000
7,000
24,000
8,000
L2,000
50,000
12,000
10,000
4,000
20 000
6,000
2.000
3,21 ,000
5,000
1
Additional lnformation ;
(i) Depreciate fumiture by \0o/o on original cost.
(ii) A provision for doubtful debts is to be created
to the extent of 5o/o on sundry debtors.
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(iii) Salaries for the month of March 2006
amounting to Rs. 3,000 were unpaid which
must be provided for. Salaries included
Rs. 2,000 paid in advance.
(iv) lnsurance arnounting to Rs. 2,000 is prepaid.
(v) Provide for outstanding office expenses
Rs. 8,000.
(vi) Stock used for personal purpose Rs. 6,000.
(vii) Closing stock Rs. 60,000.
(b) Following is the Balance Sheet of Shyam Mills
Limited as on 31tt March 2006
LiabilitiesAmount
Rs.
iquity share capital
L2o/o Preference sharecapital
Reserve fund
I4o/o Debentures
Sundry Creditors
Bills payable
Tax provision
Outstanding expenses
Total
5.00.000
00.000
00,000
00,000
60,000
00,000
30,000
10.000
1
4
7
1
1
20,00,000
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Assets AmountRs.
I r ixed assets 18,00,000
Less Dep. 5,00,000
Investrnent (Short term)
Stock
Book Debts
Bank balance
Total
13,00,000
1,50,000
3,00,000
2,00,000
50.000
20,00,000
Other information supplied is as follows :
(1) Net sales 30,00,000
(2) Cost of goods sold 25,80,000
(3) Net income before taxes 2,00,000
(4) Net income after taxes 1,00,000
(5) Book debts as
on 1tt April 2OO5 3,50,000
You are required to calculate the following ratios :
(i) Debtors' Turnover Ratio
(ii) Proprietary ratio
(iii) Current ratio
(iv) Gross profit ratio
(v) Net profit ratio 10
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2 . (i) What is meant by time value of money ?
(ii) Explain the following with the help of examples :
(a) Effective vs. Nominal rates
(b) Annuity
(c) Sinking Fund Factor
Explain in detail the role and functions of treasury
nutnagement
Define working capital and explain the various sources of
working capital. Distinguish between Commercial bill of
exchange and Commercial paper.
The present credit terms of Vijay and Cornpany are
L/IO, net 30. Its sales are Rs. 12 crore, its average
collection period is 24 days, its variable cost to sales ratio
is 0'80 and its cost of funds is I5o/o. The proportion of
sales on which customers currently take discount is 0'3.
The company is considering relaxing its terms to 2/L0, net
30. Such relaxation is expected to increase the proportion
of discount sales to 0.7 .
1 0
20
20
What will be the effect of relaxing the discount policy on
net profit ? The tax rate of the firm is 50o/o. 20
4
4
2
3.
4.
5 .
6. Write short notes on :
(a) Factoring
(b) Ecomomic Order Quantity
(c) ABC Analysis
(d) Internal Rate of Return
20
MCS-035 9,OOO
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l
DICA @evised)
Term-End Examination
Mc$035o
Jrtne, 2OOB
MCS-o:tso :! ACCOUNTTNG ANDFINANCIAL MANAGEMENT
Time : 3 hours Maximum Morks: 700
Meightoge 75Vo)
illote : Question numbet 7 is compulsory and carries4O marks. Attempt any three guesllons lrom therest, which corry 20 morks each.
l. (a) The following is the Balance Sheet of Greenwood
Company Ltd. as dn 31s' March 2O06 and 2OO7 :
Liabilities 2006 2007
Equity Share Capital
General Reserve
Bank Loan
Creditors
Banl Overdraft
Proposed Dividend
3,00,000
85,000
1,00,000
3,10,000
45,000
4,00,000
1,10,000
75,000
2,90,000
5,000
60,000
8,40,000 9,40,000
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Assets 2006 2007
Fixed Assets
Less :
AccumulatedDepreciation
ln\restment
Stock
Deb'tors
Cash
4,00,000
80,000
5,50,000
1,35,000
3,20,000
80,000
2,00,000
2,10,000
30,000
4,15,000
1,10,000
2,25,000
1,80,000
10,000
8,40,000 9,40,000
A piece of machinery costing Rs. 50,000 uns sold
for Rs. 30,000, accumulated depreciation thereon
being Rs. 10,000. You are required to prepare'Fmd-Flow Statement'.
Using the information given below compute the
Pay-back Period under Traditional Pay-back method
and Discounted Pay-back Method :
Initial Outlay
Economic Life
Proft ofter tox
ld year
2d gear
3d year
4fi year
5s year
Mcs-o3s o 2
Rs. 80,000
5 years
Rs.
6,000
14,000
24,OOO
15,000
Nil
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Depreciation has been calculated on Straight Line
Method. The cost ol capital is 20% and P'V'F' at
ZO%t are t
Year P.V.F,
I 0'83
2 0'69
Jn.<e
4 0'48
5 0.40
Fxpfain the foffowing conceph of accounting t 2O
(i) Business EntitY concept
(ii) Cost concePt
(tii) Periodicityconcept
(iv) Materialityconcept
State the signi{icance and method ol computation of the
follovuing ratios : 20
(i) Debt-Equity Ratio
(ii) Op€rating Ratio
(ili) Quick Ratio
M Debtors Tumover Ratio
Define Working Capital Management. Why is it important
to sh.rdy the management o{ working capital as a s€parate
area in Financiaf Management 2 20
MCs-o35 o P.T.o .
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c . A factory requires 1,500 units of an item per month, eachcosting Rs. 27. The cost per onder is Rs. 150 and thelnventory camTing charges work out to be 20% of thear,€rage inventory. Find otrt EOe and the number of orderswf yeaf .
Would you accept a 2Vo discounr on a minimum supply of1200 units ?
Discuss the consequences of relaxing the pblry on ,(i) Credit standards
(ii) Credit period
(iii) cash discount
(iv) Collectionefforts
Mcs-035 @ 4,OOO
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MCA (Revised)
Term-End Examination
June, 2O08
MCS-Gi5 : ACCOUNTING AND FINANCIALMANAGEMENT
Time : 3 hours
Note : Question number 7 is compulsory and carries
40 morks- Attempt any three questions lrom the
rest, which carrY 2O morks each'
1. (a) The following is the Trial Balance extracted from the
book of M/s Shiv Shankar on 31't March 2007 :
Mdximum Marks : 1O0'
Nlleightoge 750/o)
Trial Balance
Debit Balances Amount Credit Balances Amount
Furniture
Motor Car
Building
Bad Debts
Sundry Debtors
Opening Stock
640
6,000
7,500
175
4,000
3,460
Capital
Reserve lor Bad Debts
Sundry Creditors
Sales
Bank Overdraft
Purchase Return
t2,500300
2,400
12,850
5,450t z J
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Credit BalancesPurchase
Sales Retum
Interest
Tax and Insurance
Cash in hand
Car Expenses
General Charges
Salaries
5,475
200
118
800
650
900
782
3,300
Commission
Prepare his final accounts taking into account thefol.lowing adjustments :
(i) Closing Stock Rs. 3,250.
(ii) Depreciate building at 5% and motor car at70%.
(iii) Rs. 285 due for interest on Bank Overdraft.(iv) Salaries have been pafrl for 1l months.(v) Insurance Rs. 100 is prepaid.
(ui) Wriie-off Rs. IO0 as furiher bad debts andincrease the reserve for Bad and Doubdul debtsto 5% on debtors.
(vit C'oods costing Rs. 300 were giwn away ascharity.
(viii) The car is wholly used for private purpose by theproprietor.
20
MCS-035
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From the following information, prepare Cash FlowStatement :
Net profit for the year 2005 after providing
Rs. 20,000 as depreciation was Rs. 60,000. During2005, company dalared equity dividend @ l0%, andpaid Rs. 15,000 as income tax.
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2. (a) Why should accounting ?ractices be siandarrdisei ?
Explain.
(b) What progress has been made in lndia -regarding the
siandardisation of accounting practices ? 20
3. What do you understand by "Financial Management" ?What is the relationship of finance function io production
and marketing functions ? 20
4. Describe the term "Time Value of Money". How will 5roudetermine the future value of money ? Also describe howyou are going to compute the present and future rralue of
20an annuity.
5. What do you understand by Cash rnanagement ? Explainthe Baumol model of Cash manaqement. 20
6. Explain the follou,ing :
(i) Credit Policy Variables
(ii) Objectives of Inventory Management
MCS-035 1 4,OOO
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c)rlf:.c\lr--l
MCA (Revised)
Term-End Examination
December,2008
MCS-035: ACCOUNTING AND FINANCIALMANAGEMENT
Time : 3 hours Maximum Marks : 100(Weightage 75%)
Question number 7 is compulsory and carries 40 Marks.Attempt any three questions from the rest, zahich carry20 Marks each.
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(a)L . The following Trial Balance is extracted from
the books of M/s Sunrise Traders as on 31st
March 07.
30
Trial Balance
Particulars Dr. Cr.
Furniture and Fittings
Motor vehicles
Building
Bad debts
Sundry Debtors
Stock (1 January 2007)
Advertising
Interest account
Cash
Taxes and Insurance
General expenses
Salaries
Purchases and Sales
Sales and Purchases return
Capital account
Provision for bad debts
Sundry Creditors
Bank overdraft
Commission
6,400
62,500
75,000
r,250
38,000
34,600
4,500
1 , 1 8 06,500
12,500
7,820
33,000
54,750
2,000
1,54,500
r,250
1,25,000
2,000
25,000
28,500
3,750
3,40,0003,40,000
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The following adjustments are to be made :
(i) Stock in hand on 3L-L2-2007 was
(iir)
Rs. 32,500.
Depreciate building @ 5%, Furniture
@ 10% and Motor vehicles @ 20%.
Rs. 850 is due for interest on Bank
overdraft.
(iv) Salaries Rs. 3,000 and Taxes Rs. 1200
are outstanding.
(") Insurance amounting to Rs. 1000 is
prepaid.
("i) rf'd Commission is received in
advance.
("it) Write off further Rs. 1000 as Bad Debts
and Provision for Bad Debts is to be
made equal to 5% on Sundry Debtors.
Prepare a Trading and Profit and Loss
Account lor the year ending
3L-03-2007 and a Balance Sheet as on
that date.
(ii)
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Balance SheetLiabilities Amount Assets Amount
Equity share capital
6% Preference share
7% Debentures
8% Public Deb. 5 years
Bank overdraft
Creditors
Outstanding Creditors
Proposed dividend
Reserves
Provision for Taxation
P/L A/C
5,00,000
5,00,000
2,00,000
1,00,000
2,00,000
3,00,000
35,000
50,000
7,50,000
1,00,000
1.00.000
Cash
B/RInvestment(short term)
Debtors
Stock
Furniture
Machinery
Land & Building
Goodwill
Preliminary Exp.
in hand
Bank
10,000
50,000
1,50,000
1,00,000
3,50,000
2,00,000
1,50,000
5,00,000
I 1,00,000
1,75,000
50.000
28,35,000 28,35,000
(b) Following is the Balance Sheet of Bhoomi Limited 10
as on 31st December,2007 :
During the year Provision for Taxation was
Rs. 1,00,000. Dividend Proposed was Rs. 50000.
Profit carried forward from the last year was
Rs. 1,50,000. You are required to calculate.(i) Current Ratio(ii) Quick Ratio(ii| Proprietory Ratio(i") Capital Gearing Ratio(v) Debt Equity Ratio
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20
20
2.
3.
Explain the significance of Finance Managementfor the success or the failure of business operations.
M/s XYZ has an existing Sales of Rs. 50 Lakhs
and al lows a credit period of 20 days to i ts
customers. The firm cost of Capital is 10% and
the ratio of variable cost to Sales is 85%. The firm
is contemplating on increasing the credit period
to 40 days which would result in an increased
sales of Rs. 5 Lakhs. The Bad debts on increased
sales are expected to be 8 percent. The tax rate
for M/sXYZ is 4A%. Should the firm extend thecredit period.
What are the objectives of Inventory Management ?
Explain the techniques of inventory control.
14/hat is Capital Budgeting ? Explain its process.
Write short notes on :(a) Capital Rationing
(b) Aggressive Working Capital Shategy
(c) Materiality Concept
(d) Economic Order Quantity (EOQ)
4. 20
20J .
6.
- o O o -
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roc{robo
MCA (Revised)
Term-End Examination
june, 2009
MCS-035 : ACCOUNTING AND FINANCIALMANAGEMENT
Time : 3 hours Maximum Marks : 1A0(tVeightage : 75%)
Nate : Question number f. is Compulsory and carries 40 marks.
Attempt any three questions from the rest, zuhich carry
20 marks each.
(u) The following data are being taken from the
records of Tata Corporation as on 31st
March 2008 :
Rs.
Cash 30,000Debtors 15,000Stock 10,000
Pre paid Expenses 5,000Creditors L5,000Bills Pavable 3,000Sales 50,000Purchase 36,000Purchase Return 6,000
On the basis of the above informations
compute the following :
201 .
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Working Capital Ratio ;
Acid Test Ratio ;
Stock and Cost of Sales Ratio ;
Payable Turnover Ratio ;
Average Time of Payable ;
(b) From the following particulars of XYZ & Co., 2A
you are required to determine the working
capital required by the company for the next
year :
Rs.
Annual Sales 14,40,000
Cost of Production (inculding
depreciation of Rs. 1,20,000"12,00,000
Raw Material Purchase 7.,05,000Monthly Expenditure 25,0A0
Estimated Opening Stock of
Raw Material l_,40,000Estimated closing Stock of Raw
Material 1,25,000
Inventory normsRaw Materials 2 months
Work-in-progress 7z month
Finished goods L month
(i)
(ii)
(iii)
(i")
(")
MC5-035
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2.
The firm enjoys a credit of half a month on its
purchase and allows one month credit on its
supplies. On sales orders the company receives
an advance of Rs. 15,000.
You may assume that production is carried out
evenly throughout, the year and minimum cash
balance desired to be maintained is ns.10,000.
Write short notes on the following : 2A
(u) Accrual concept
(b) Materiality concept
(.) Conservatism concept
(d) Consistency concept
What is meant by 'Fund Flow Statement' ? 2A
Enumerate the uses of fund flow statement.
3 .
4. Explainr the followin g (Any tuso) :
: (u) Pay back Period Method
J .
6 .
(b) Net Present Value Method
(.) Internal Rate of Return Method
What are the objectives of Cash Management ?
Discuss the functions of cash management.
\uVhat do you mean by 'Economic Order Quantity ?
How it is determined ?
20
20
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I MCS-0351
MCA (Revised)
Term-End Examination00 December, 2009oo
MCS-035 : ACCOUNTING AND FINANCIALMANAGEMENT
Time : 3 hours Maximum Marks : 100
(VVeightage : 75%)
Note : Question number 1 is Compulsory and carries 40 marks.
Attempt any three questions from the rest, which carry
20 marks each.
1. (a) From the following comparative balance 20sheets of X ltd; prepare Fund Flow statementfor the year 2001 assuming that proposeddividend is a current liability.
Balance SheetLiabities 1/1/2001 31-12-2001 Assets 1/1/2001 31-12-2001Share Capital 1,00,000 1,00,000 Fixed Assets 1,00,000 1,80,000
Profits & Loss LessA/C 20,000 60000 Depreciation 10,000 28,000
Debentures 1,00,000 90,000 1,52,000Creditors 50,000 70,000 Stock 20,000 48,000Proposed
DebtorsDividend 10,000 14,000 30,000 50,000
Cash andBank 40,000 94,000
1,80,000 3,44,000 1,80,000 3,44,000
Assume that Rs. 10,000 dividend was proposedfor the year 2000 and Rs. 14,000 dividend isproposed for the year 2001.
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(b) A firm is desiring an increase in credit period 20from 30 to 60 days. The average collectionperiod which is 45 days at present isexpected to increase to 75 days. It is alsolikely that the bad debt expenses increasefrom 1% to 3% of sales. Total credit salesare expected to increase from the level of30,000 units to 34,500 units. The presentaverage cost per unit is Rs. 8, the variablecost and selling price per unit are Rs.6 andRs.10 respectively. Assume that the firmexpects a return of 15%, should the firmextend credit period ?
What do you understand by 'Final Accounts' ? 20Why are they prepared ?
What are the objectives of financial management 20and discuss types of financial managementdecisions that a firm makes ?
4. Write Short Notes on the following : 20Time Value of Money
Liquidity Ratios
5. Explain briefly 'Cash Management' ? What are 20the objectives of cash management ?
6. What are the important dimensions of a firm's 20credit policy ?
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MCS-035No. of Printed Pages : 4MCA (Revised)
Term-End Examination
June, 2010
MCS-035 : ACCOUNTING AND FINANCIALcV
MANAGEMENT(NI Time : 3 hours Maximum Marks : 100
(Weigh tape : 75%)Note : Question number 1 is Compulsory and carries 40 marks.
Attempt any three questions from the rest, which carry20 marks each.
1. (a) From the following Trial Balance and otherinformation prepare the Trading and Profitand Loss Account for the year ended 31stMarch, 2008 and Balance Sheet as on thatdate :
ParticularsDebit Balance
(Rs.)Credit Balance
(Rs.)Sundry Debtors 32,000 -Stock (Is' April, 2007) .... 22,000 -Cash in Hand 35 -Cash in Bank 1,545 -Plant & Machinery 17,500 -Sundry Creditors - 10,650Trade Expenses 1,075 -Sales - 1,34,500Salaries 2,225 -Carriage Outwards 400 -Rent 900 -Bills Payable - 7,500Purchases 1,18,870 -Discounts 1,100 -Premises 34,500 -Capital (Ist April, 2007) - 79,500
2,32,150 2,32,150
25
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The Stock on 31 st March, 2008 wasRs. 12,450. Rent was unpaid to the extentof Rs. 85 and Rs. 150 were outstanding forTrade Expenses; Rs. 400 are to be writtenoff as bad debts out of the above debtors;and 5% is to be provided for doubtful debts.Depreciate Plant and Machinery by 10%and Business Premises by 2%.
Manager is entiteld to a commission of 5%on net profit after charging his commission.
(b) From the following Balance Sheets of 15M/s. Gupta & Co., prepare the CashFlow Statement for the year endedMarch 31, 2007.
Liabilities2006(Rs.)
2007(Rs.)
Assets2006(Rs.)
2007(Rs.)
Creditors 20,000 22,000 Cash 8,000 22,000Outstanding Debtors 15,000 11,000
Bills
Expenses 5,000 1,000 Receivable 5,000 ---Loan From X 10,000 5,000 Stock 20,000 28,000
FixedCapital 1,08,000 1,68,000 Assets 95,000 1,35,000
1,43,000 1,96,000 1,43,000 1,96,000
During the year, the proprietor introducedRs. 20,000 as additional capital. The netprofits for the year, after charging Rs. 5,000as depreciation on fixed assets, wereRs. 50,000.
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2. Krishna Ltd. is considering an expansion of the 20installed capacity of one of its plant at a cost ofRs. 35,00,000. The firm has a minimum requiredrate of return 12%. The following are the expectedcash inflows over next 6 year after which theplant will be scrapped away for nil value.
Cash PVF of Rs.
Year inflows (Rs.) 1/-at 12%
1 10,00,000/- 0.893
2 10,00,000/- 0.797
3 10,00,000/- 0.712
4 10,00,000/- 0.636
5 5,00,000/- 0.567
6 5,00,000/- 0.507
Consider the proposal on the basis of the NPVtechniques.
'Profit maximization can not be the ultimate 20objective of financial management.' Elucidate thestatement.
What is meant by Working Capital ? Discuss the 20factors affecting the determination of workingcapital. Distinguish between permanent workingcapital and temporary working capital.
5. Discuss the following generally accepted 20accounting principles in India.
Business Entity Concept
Disclosure Convention
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6. Write short note on : 20
Stock - Out Cost
Time Value of Money
Need for holding the cash
Importance of Ratio analysis
(e) Liberal Credit Policy
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MCS-035 No. of Printed Pages : 3
MCA (Revised)
Term-End Examination
June, 2011
MCS-035 : ACCOUNTING AND FINANCIAL MANAGEMENT
Time : 3 hours
Maximum Marks : 100 (VVeightage : 75%)
Note : Question number 1 is Compulsory and carries 40 marks. Attempt any three questions from the rest, which carry 20 marks each.
1. The balance sheets of Bharat Machinery Ltd. as 25 on December 31, 2009 and 2010 are as follows.
Particulars Dec. 31, 2009 Dec. 31, 2010 Assets Plant and Machinery 5,00,000 8,00,000 Land and Building 80,000 1,20,000 Stock 1,00,000 75,000 Sundry Debtors 1,50,000 1,60,000 Cash 20,000 20,000
8,50,000 11,75,000 Liabilities and Capital Share Capital 5,00,000 7,00,000 Profit and Loss A/c 1,00,000 1,60,000 General reserve 50,000 70,000 Sundry Creditors 1,53,000 1,90,000 Bills payable 40,000 50,000 Outstanding Expenses 7,000 5,000
8,50,000 11,75,000
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Additional Information : (i) Depreciation of Rs. 50,000 has been charged
on machinery during the year 2010. (ii) A piece of machinery was sold for Rs. 8,000
during the year 2010. It had cost Rs. 12,000 and depreciation of Rs. 7000 had been provided on it. Prepare a schedule of changes in working capital and a statement showing the sources and application of funds for the year 2010.
(b) M/s ABC Ltd. is considering setting up a 15 new plant costing Rs. 18 lakhs. The operational and maintenance cost (excluding depreciation) are expected to be Rs. 3 lakhs. The useful life of the plant is 10 years with negligible salvage value. The rate of depreciation is 30% (written down value method). The plant will generate an income of Rs. 7 Lakhs per annum. The tax rate for the firm is 40%. Calculate the net present value, internal rate of return and benefit cost ratio taking the cost of capital as 12%. The p.v. factors at 12% for year 1 to 10 are •893, -797, -712, •636, -567, .507, -452, •404, •361 and -322 respectively. PV factors at 13% for year 1 to 10 are -885 •783 -693, •613, -543, -480, -425, -376, -333, •295 respectively.
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2. Discuss the concept of working capital and 20
explain the factors that determine the working
capital needs of a firm. How is operating cycle
measured ? Discuss.
3. Write short notes on the following : 20 (a) Wealth maximisation
(b) Solvency ratios
(c) Periodicity concept
(d) Factoring services
4. Explain in detail the role and functions of treasury 20
management. How is excess liquidity harmful to
the firm ?
5. What are credit policy variables ? Discuss the 20
quantitative effect of relaxing credit standards on
profit.
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