6204 CM (Pages: 4) Reg. No. .................

Name ......................

BCom DEGREE EXAMINATION, MARCH 2020

Sixth Semester
ABCM629: Management Accounting
(2015 Admission onwards)

Time: 3 Hours Maximum: 80 Marks

Part A
Answer all questions. Each question carries 2 mark.

1. Discuss the role of a management accountant in a business

2. What are the differences between a common size balance sheet and a comparative balance sheet?
3. What do you mean by dividend yield ratio?
4. What do you mean by interest coverage ratio?
5. From among the following two companies whose shares will be preferred by a prospective investor.
EPS: A Ltd: Rs. 12 B Ltd. Rs. 20 Market price per share Rs. 240 Rs. 480
6. Distinguish between fund flow statement and balance sheet
7. Mention any three advantages of cash flow analysis.
8. What are the functions of a budget committee?
9. What do you mean by principal budget factor?
10. Distinguish between a fixed budget and a flexible budget?

(10×2=20)

Part B
Answer any six questions. Each question carries 5 marks.

11. Discuss the functions of Management Accounting.

12. From the following income statements of a Camay Ltd. , for the year ending on 31st March 2017
and 2018 prepare a common size income statement.
Particulars 2017 (Rs) 2018 (Rs)
Sales 50,00,000 70,00,000
Other income 2,00,000 1,40,000
Total 52,00,000 71,40,000
Cost of sales 32,50,000 49,00,000
Administrative expenses 2,00,000 2,10,000
Selling & Distribution expenses 3,00,000 3,50,000
Interest on loan 2,50,000 4,90,000
Net Profit 12,00,000 11,90,000
Total 52,00,000 71,40,000
13. What do you mean by leverage? How will you assess the leverage using ratios?

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14. From the following figures find: (a) Sales (b) Sundry debtors (c) Closing stock (d) Sundry Cred-
itors
Gross Profit for the year 2018: 7,60,000
Gross Profit Ratio: 25%
Credit Period allowed to debtors: 1.5 months
Lag in payment to suppliers: 40 days
Opening stock: 1,35,000
15. From the following data abstracted from the annual accounts of Fragro Ltd., you are required to
calculate: (a) Return on capital employed and (b) Return on net worth
Particulars Rs. in lakhs
Share Capital 250
General Reserve 120
Investment allowance Reserve 40
14% Long term debt 350
Profit before Tax 150
Provision for tax 62
Proposed Dividend 25
16. Calculate Fund from Operations from the following information:
Net Profit for the year Rs.2,45,000.
Loss on sale of investments Rs.15,200
Depreciation on fixed assets Rs.1,20,000.
Transfer to reserve fund Rs.10,000.
Sale of machinery for Rs.6,000 (Book value Rs. 5,100)
Good will written off during the year Rs.7,500
17. Explain how cash flow analysis of a listed company is done as per AS3.
18. Calculate cash flow from operating activities from the following P&L account for the year ending
31st March 2018.
Particulars Rs Particulars Rs
Salaries 14,000 Gross Profit 52,000
Rent 10,000 Profit on sale of land 9,000
Provision for bad debts 2,000 Income Tax Refund 3,000
Depreciation 3,000
Goodwill written off 2,500
Loss on sale of furniture 1,500
Provision for Tax 6,000
Proposed dividends 7,000
Net profit 18,000
64,000 64,000
19. Prepare a flexible budget for the production at 80% and 100% capacity on the following infor-
mation.
Production at 50% capacity 5000 units
Raw materials Rs. 30 per unit
Direct Labour Rs. 20 per unit
Direct expenses Rs. 10 per unit
Factory overhead (50%) fixed Rs. 40,000
Administrative expenses(70% variable) Rs. 80,000

(6×5=30)
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Part C
Question 20 is compulsory and answer any two from the rest.
Each question carries 10 marks

20. What do you mean by ‘CAMEL’. Discuss the various elements of CAMEL in detail with suitable
examples.
21. From the following information relating to Wise Man Ltd., you are required to prepare its sum-
marised balance sheet
Current Ratio 2.5
Acid test ratio 1.5
Gross Profit/ sales 0.2
Net working capital/Net worth 0.3
Sales/Fixed Assets Ratio 2.0
Sales/Net worth Ratio 1.5
Sales/Debtors Ratio 6.0
Reserves/Capital Ratio 1.0
Net worth/Long Term Loan Ratio 20.0
Stock Velocity 2 Months
Paid up share Capital 10,00,000
22. The summarized Balance Sheets of Bliss Ltd. as on 31st March, 2008, 2009 are as follows. Pre-
pare Fund Flow Statement.
Liabilities 2008(Rs.) 2009(Rs.) Assets 2008(Rs.) 2009(Rs.)
Equity Share Capital 3,60,000 4,20,000 Fixed assets (cost) 5,50,000 6,60,000
Capital Reserve - 10,000 Less accumulated
General Reserve 1,20,000 1,50,000 Depreciation 1,20,000 1,50,000
Profit and Loss Account 60,000 70,000 4,30,000 5,10,000
Debentures 1,80,000 1,20,000 Investments at cost 1,10,000 1,10,000
Sundry creditors 1,00,000 1,50,000 Sundry debtors less
Outstanding liabilities 5,000 7,000 Provision 1,55,000 1,50,000
Provision for taxation 45,000 50,000 Stock 1,20,000 1,60,000
Proposed dividend 20,000 25,000 Bills receivable 25,000 34,000
Prepaid expenses 6,000 7,000
Cash 37,000 25,000
Preliminary Expenses 7,000 6,000
8,90,000 10,02,000 8,90,000 10,02,000

(a) During the year 2009, Fixed assets having book value of Rs.6,000 have been sold for Rs.5,000.
Accumulated depreciation on fixed assets sold was Rs.19,000
(b) Taxation liability for the year 2008 has been settled and paid at Rs.35,000
(c) Debentures were redeemed at a premium of Rs.10,000
(d) During the year 2009, investments costing Rs.50,000 were sold and profit on sale was credited
to Capital Reserve. During the year, investments of the same cost were purchased for cash.
(e) During 2009, Rs.9,000 were written off as bad against provision for doubtful debts account.

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23. The Income Statement and Balance Sheets of Pacific Ltd. are given below.
Income Statement for the Year Ended 31-03-2012
| |
Net Sales: 4,00,000
Less: Cost of Sales 2,30,000
Gross Profit 1,70,000
Less: Operating Expenses 45,000
Depreciation on Plant & Machinery 22,000
Non-operating expenses (Loss on sale of plant) 3,000 70,000
1,00,000
Add: Dividends on Investments 2,500
Net profit before tax 1,02,500
Less: Provision for tax 30,000
Interim dividend paid 20,000 50,000
Profit carried to Balance Sheet 52,500
Balance Sheet as on 31-03-2011 and 31-03-2012
Liabilities 31-03-11 (|) 31-03-12 (|) Assets 31-03-11 (|) 31-03-12 (|)
Share Capital 5,00,000 6,00,000 Land & Building 1,50,000 1,50,000
Profit & Loss A/c. 79,500 1,32,000 Plant & Machinery 4,80,000 5,00,000
Debentures 2,00,000 1,80,000 Investments 1,20,000 2,00,000
Sundry Creditors 54,000 39,000 Stock 65,000 73,000
Bank Overdraft 35,000 15,000 Sundry Debtors 47,000 32,000
Cash in hand 6,500 11,000
8,68,500 9,66,000 8,68,500 9,66,000
The book value of Plant sold was | 18,000
You are required to prepare a Cash flow statement of the company
24. The budgeted expenses for production of 10,000 units in a factory are given below.
Items of Cost Cost Per Unit
Materials 50
Labour 25
Variable Expenses 15
Fixed Overheads (1,20,000) 12
Variable overheads 10
Selling expenses (40% fixed) 15
Administrative expenses(2,50,000) 25
Distribution expenses (25% fixed) 8
Total 160
Prepare a budget for production of 15,000 and 20,000 units of the product.

(3×10=30)