note' ?;:::'i,!;#!,,i' i,: :::,:isory · 14,500 500 7 l,000 6,300 1,7 6,580 l,7...

$: Note' ?;:::'i,!;#!,,i' i,: :::,:isory · 14,500 500 7 L,000 6,300 1,7 6,580 L,7 6,580 Following adjustments are to be made : (i) Write off Machinery by \00/o and Patents 20o/o. (ii)$
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

P.T.O.MCS-035

Downloaded from www.paraman.in

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

MCS-035


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)

MCS-035 P.T.O.


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

MCS.O35 4


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


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

MCS-Ms @ P.T.O.


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


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


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

Mcs-035 @ 4


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.

MCS-035 @ P.T.O.


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


MCA (Revised)


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

MCS-O35 P . T . O .


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.

MCS-035


(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

M CS-035 P . T . O .


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

MCS.O35


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


l

DICA @evised)


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

Mcs-035 O 1 P.T.O.


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


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 .


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


MCA (Revised)


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

MCS-035 P.T .O .


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


IC\l A A o T O L O

H C \ I N H C \

N

I

c\

o o o o o

c o N o l r r l oN H N ( O .

6l

a

T

5g

EE

o a

€ r ; n z8 d d d z

\o

6lx ) < : < > < ) < =d d c i i L . i < iO C C r l C {cri

t5

cr)-

ro

o o o r o r o oo r J ) a {N

6

Ei

-o

5

: g l q= 6 0 !d 6 € 6} . F E E

E s ? e e{ i - q € E 5 q# E E 3 g E 3

!)a)

tho

6|E

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.

P . T . O .MCS{35


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


c)rlf:.c\lr--l

MCA (Revised)


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.


(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


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)


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


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 -


roc{robo

MCA (Revised)


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 .

MCS-035 P.T.O.


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


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

2A

MC5-035

- o O o -


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 ?

- o 0 o -

MCS-035 2


MCS-035No. of Printed Pages : 4MCA (Revised)


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

MCS-035

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P.T.O.


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


MCS-035 No. of Printed Pages : 3

MCA (Revised)


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

MCS-035

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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.

MCS-035 3


note' ?;:::'i,!;#!,,i' i,: :::,:isory · 14,500 500 7 l,000 6,300 1,7 6,580 l,7...

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