6TH Sem Previous Year Question Paper

MATHUR SIR CLASSES – HOWRAH | GIRISH PARK – 7003165955 | 8100254884
2020
FINANCIAL MANAGEMENT — HONOURS
Course: DSE 6.2A
Full Marks: 80
Group - A
Answer any two questions. 15×2
1. You are working in a firm having ROI 18% and Cost of Capital 12%. For a proposed project
with effective life of 3 years, the inflows are estimated as ₹67,500, ₹76,500 and ₹56,700.
Calculate the present value of benefits from the project. 15
2. Discuss Matching and aggressive approaches in the context of Working Capital Financing
strategies. 15
3. Y Ltd. started a project with the initial investment of ₹5,00,000. The life of the project is 5
years. It is expected that cash inflows starting from first year to fifth year will be ₹1,10,000,
₹1,40,000, ₹1,80,000, ₹2,50,000 and ₹3,80,000 respectively. What will be the Pay-back period
of the project? 15
4. From the following information, determine the theoretical market price of each equity
share of a company as per Walter’s Model:
Earnings of the Company ₹10,00,000
Dividend paid ₹5,00,000
No. of equity shares outstanding ₹2,00,000
Cost of Equity capital 12%
Rate of return on investment 15%
15
Group - B
5. Calculate weighted average cost of capital (WACC) considering market values for AD Ltd.
from the following details:
Sources of Capital
Equity share capital (10 each) 12,00,000
Retained Earnings 28,00,000
14% Preference shares (issued at a premium of 8%) 90,000
15% Debentures 3,60,000
Other information:
* Applicable corporate tax rate 30%
* Market price per share ₹50, Dividend per share is expected to be ₹6. AD Ltd. maintains a
growth of 5% in this regard.
* Debentures of face value ₹1000 each were issued at 3% discount (with an additional
underwriters’ commission of 1.5% on face value). Tenure of Debenture 10 years. 25
6.
7. PP Construction Ltd. is considering the five possible projects to invest in, as shown below:
Project Cash Outflow (₹) PV of Cash Inflows (₹)
A 5,00,000 7,50,000
B 2,00,000 2,10,000
C 5,00,000 8,00,000
D 1,00,000 80,000
E 3,00,000 3,30,000
Available fund is ₹12,00,000. Apply Capital rationing decision concept and select the projects.
All the projects are divisible in nature. 25
8. Relevant information about two companies are given below:
X Y
Annual production capacity (Units) 1,00,000 1,50,000
Capacity utilisation and sales 75% 75%
Unit selling price (₹) 40 50
Unit variable cost (₹) 15 15
Fixed cost for the year (₹) 2,00,000 3,00,000
Equity capital (₹10 per share) 5,00,000 7,00,000
10% Preference share capital (₹) 50,000
15% Debentures (₹) 1,00,000 2,00,000
Determine the degree of Operating Leverage, degree of Financial Leverage, degree of
Financial Leverage and Earning per Share of two companies. (Tax rate 40%). 25
9. The capacity of your company is to produce 40,000 units of valve per annum. The company
expects to operate at 60% of the capacity level. You are required to ascertain the working
capital requirement at the current level of operation.
The following information on the cost-price structure of valves at the current level of
production is available:
Elements of costs Per unit (₹)
Raw-material 6
Direct labour 3
Overhead 4
Total cost 13
Profit 3
Selling price 16
Raw-materials are in stock, on an average, for 2 months. The duration of the production
process is half a month. Finished goods are in stock, on an average for 1 month. Credit allowed
to customers is 3 months and that obtained from suppliers is 1.5 months, lag in payment of
wages is half a month. There is usually no lag in payment of overhead. 25
10. X Ltd. wants to purchase one machine out of two mutually exclusive machines under
consideration. Other information related to these machines are as below:
Particulars Machine 1 Machine 2
Purchase price (₹) 3,00,000 2,80,000
Estimated life (years) 5 5
Net cash flows (₹)
Year 1 80,000 60,000
Year 2 1,20,000 80,000
Year 3 90,000 1,20,000
Year 4 85,000 1,50,000
Year 5 1,58,000 92,000
Compute the NPV of each machine assuming a cost of capital of 10%. Which machine should
the company buy?
The present value of ₹1 to be received at the end of each year at 10% is given below:
Year 1 2 3 4 5
P.V. (₹) 0.909 0.826 0.751 0.683 0.621
25
11. (a) Mention any five important factors that a firm should consider in formulating dividend
policy.
(b) Discuss financial leverage with reference to the formulae. 13+12
2020
FINANCIAL MANAGEMENT — GENERAL
Course: DSE 6.2A
Full Marks: 80
Group – A
1. What is the function of Financial Management? 15
2. Discuss the role of retained earnings as a source of corporate finance? 15
3. A company has issued debenture of Rs. 51 lakhs to be repaid after 7 years. How much
should the company invest at the end of each years in a sinking fund earning 12%, to repay
the debenture? (CVIFA 12%, 7 = 10.089) 15
4. The current market price of an equity shares of Rs. 10 each is Rs. 40. The current divided
per share is Rs.6. If the dividend is expected to grow at the rate of 5%, find out the case of
equity capital. 15
Group – B
5. (a) What is Trading on equity?
(b) Calculate the degree of operating leverage, degree of financing leverage and combined
leverage from the following data:
Sales 1,00,000 units @ 2 per unit = RS. 2,00,000
Variable cost per unit 2 Rs. 0.70
Fixed cost Rs. 1,00,000
Interest charges Rs. 3,000 10+15
6. You are required to prepare a statement showing the working capital needed to finance a
level of annual activity of 52,000 units of capital. The following information are available.
Element of cost Amount per unit (Rs.)
Raw Material 8
Direct labour 2
Overhead 6
Selling price 20
Raw material is in stock, on an average for 4 weeks. Materials in process, on an average for
2 weeks. Finished goods are in stock, on an average for 6 weeks. Credit allowed to customer
is for 8 weeks, credit allowed by supplier of goods is 4 weeks. Lag in payment of wages is in
and half weeks. It is necessary to hold cash in hand and at bank amounting Rs. 80,000. 25
7. (a) What do you meant by working capital? Why is working capital necessary for a business?
(b) Write about the financial policy of current assets pf a firm which follows conservative
policy of maintaining current assets. 13+12
8. Details regarding three companies are given below:

X Ltd. Y Ltd. Z Ltd.
Return on investment 15% 10% 8%
Cost of Capital 10% 10% 10%
EPS Rs. 10 Rs. 10 Rs. 10
By Walter’s Models, you are required to calculate the value of an equity share each of the
companies when dividend pay-out ratio is (a) 20% and (b) 0%. 13+12
9. X Ltd. is presently considering two machines for possible purchase. Other information
related to the machines is as follows:
Machine – 1 Machine – 2
Purchase Price Rs. 50,000 Rs. 60,000
Estimated Life 4 Years 4 Years
Cash Flow before Depreciation and Tax:
Year 1 Years 2 Year 3 Year4
Machine – 1 25,000 25,000 25,000 25,000
Machine – 2 45,000 19,000 25,000 27,000
Rate of Tax is 40%

Compute net present value of each machine assuming cost of capital is %. Which machine the
company should buy? The present value of Rs. 1 at 8% is as follows:
Y1 = 0.926, Y2 = 0.857, y3 = 0.794, and y4 = 0.735 (Assume straight line method of
Depreciation). 10+10+5
10. Write Short notes on the following: 13+12

(a) Accounting rate of return.
(b) Capital rationing.
2021
Course: DSE 6.2A
Full Marks: 80
Group – A
Answer any four questions:
1. Explain the functions of the Chief Financial Officer or Manager in the Modern Business
Environment. 10
2. Sugata borrows from a bank Rs.1,00,000 at 12% rate of interest to be paid in 5 equal
annual installments at the end of each year. What will be the size of the installment?
[Given (PVIFA) (12, 5) = 3.605] 10
3. A sum of Rs.5,000 is invested for 2 years at 10% interest rate compounded biannually.
Find the maturity amount. 10
4. (a) What do you mean by Capital Budgeting?

(b) What do you mean by Discounted Pay-back Period Method? 5+5
5. The following data relate to a firm:

(i) Earnings per share = Rs. 25
(ii) Capitalization rate = 12%
(iii) Retention ratio = 40%
Determine the share price using Gordon’s Model if IRR is 15%. 10
6. Discuss the features of Optimum Capital Structure. 10
7. A firm has sales of Rs.5,00,000, variable cost of Rs.3,50,000 and fixed cost of Rs.1,00,000
and debt of Rs.2,50,000 at 10% rate of interest. You are required to calculate operating and
financial leverages of the company. If the firm wants to double its EBIT, how much of a rise
in sales would be needed on a percentage basis? 7+3
8. Discuss the Role of Debenture in Company Financing. 10
Group – B
Answer any two questions.
9. RIL Ltd. opts for the following capital structure:

Equity Shares (1,00,000 shares) Rs.50,00,000
15% Debentures Rs.50,00,000
Total Rs.100,00,000
The company is expected to declare a dividend of Rs.5 per share. The market price per share
is Rs.50. The dividend is expected to grow by 10%.
Compute Weighted Average Cost of Capital of RIL Ltd. assuming 50% tax rate. 20
10. From the following information prepare a statement showing the Estimated Working
Capital requirement.
Projected Annual Sales: 26,000 units. Selling price per unit Rs.60
Analysis of Selling Price:

Material: 40%, Labour: 30%, Overhead: 20%, Profit: 10%
Time lag (on average):

Raw materials in stock – 3 weeks. Production process – 4 weeks. Credit to debtors – 5 weeks
Credit from suppliers– 3 weeks. Lag in payment of wages and overheads – 2 weeks. Finished
goods are in a warehouse – 2 weeks.
Cash in hand is expected to be 10% of the Net Working Capital. 20
11. (a) What do you mean by Internal Rate of Return? Discuss its accept and reject rule.
(b) Write a short note on Dividend Policy and Retained Earnings. 10+10
12. (a) Compute the Pay-back Period for the project:

End of the year 1 2 3 4 5
Book Value of fixed assets (Rs.) 90 80 70 60 50
Profit after tax 20 22 24 26 28
(b) What do you mean by Profitability Index? 15+5
2021
Course: DSE 6.2A
Full Marks: 80
Group – A
Answer any four questions.
1. Discuss the important functions of Financial Management? 10
2. What do you mean by wealth maximization objective of a firm? How can it be achieved by
the firm? Why is it considered superior to the profit maximization objective of the firm?
2+3+5
3. (a) What do you mean by the time value of money? What are its reasons? 5
(b) X decides to invest Rs.6,000 at the end of each year at the compound rate of interest of
12% p. a. for 8 years. What total amount he will get at the end of 8th year?
[FVAF at 12% for 8 years 12.30] 5
4. (a) Calculate the Payback Period from the following information:

Cost of machine: Rs.1,00,000; Depreciation: 10% p.a., under reducing balance method.
Corporate tax rate 40%.
Year 1 2 3 4 5
Excepted PBT (Rs. ‘000) NIL 54 88 104 125
(b) What are the distinguishing features of Capital Budgeting Decisions? 6+4
5. A firm is considering the proposal of buying a machine with installation cost Rs.5,00,000.
The machine will have a useful life 4 years after which it can be sold for Rs.70,000.
Depreciation is to be charged under straight line method. Additional working capital of
Rs.50,000 will be introduced. Profits before depreciation and tax are expected to be
Rs.1,72,000, Rs.1,98,000, Rs.2,18,000 and Rs.1,80,000 in those four years. If application tax
rate is 30%, calculate ARR of the project. 10
6. Discuss the various sources of finance to meet working capital requirement? 10
7. A firm has sales of Rs.10,00,000, variable cost of Rs.7,00,000 and fixed cost of
Rs.2,00,000. The company has debt capital of Rs.3,00,000 at 10% rate of interest. Compute
operating, financial and combined leverages. If the firm wants to double its earnings before
interest and tax (EBIT), how much rise in sales would be required? 10
8. You are given the following information in respect of ABC Ltd.

Earning Rs.1,00,000
Equity capital 5,000 shares of Rs.10 each
Cost of capital 10%
Expected rates of return (i) 9%, (ii) 10% and (iii) 12%
Assuming that dividend pay-out ratio are 0%, 50% and 100% respectively, determine the
effects of the different dividend policies on the share price of ABC Ltd. for the above
mentioned three alternative levels of rate of returns using Gordon’s model. 10
Group – B
9. (a) Discuss the relevance of Cost of Capital. What do you mean by Implicit and Explicit
Cost of Capital? 5+5
(b) A Company’s share is currently quoted in the market at Rs.30. The company paid a
dividend of Rs.5 per share last year and the investors expect a growth rate of 5% per year.
You are required to calculate: (i) Cost of Equity Share Capital of the Company and (ii) The
Market Price per share, if the anticipated growth rate of dividend is 10%. 10
10. (a) What do you mean by EBIT – EPS Analysis? Discuss its importance in Financing
Decision? 10
(b) Discuss the significance of Operating Leverage and Financial Leverage? 10
11. Following details are available from the management of BAS Ltd:
Particulars Amount per unit (Rs.)
Raw materials 120
Direct labour 45
Overhead 90
The company wants to make 15% profit on sales price.
The following further particulars are available:
Raw material are kept in stock, on average, for one month. Processing time can be taken as,
on average, half a month; Finished goods in stock, on average, for 30 days. Credit enjoyed
by BAS Ltd. in one month; Credit allowed is for two months; Average time – lag in payment
of wages and overhead is one month. Cash in hand and at bank is desired to be maintained
at Rs.30,000. BAS Ltd. prefers to value debtors at sales value. Compute the working capital
required for BAS Ltd. with necessary assumptions to finance a level of activity of 24,000
units of production in the next year. 20
12. (a) SMB Ltd. has considered two projects with economic life of 6 years having
following cash inflows after tax:
End of the 1 2 3 4 5 6 Total
year (Rs.)
Project 1 1,00,000 80,000 75,000 70,000 68,000 62,000 4,55,000
Project 2 62,000 68,000 70,000 75,000 80,000 1,00,000 4,55,000
As the total cash inflows are identical and investment amount is Rs.3,30,000 for the both
projects, the management of SMB Ltd. has decided to go for any one of the given projects.
Do you support their decision? Justify your answer?
The post – tax cost of capital of SMB Ltd. Is calculated as 10%, and the required
discounting factors are given below:
Year 1 2 3 4 5 6
DF @ 10% 0.909 0.826 0.751 0.683 0.621 0.564
(b) Project A and Project B are the two mutually exclusive projects under consideration.
While Project A has a higher NPV, Project B has a higher IRR. Which project should be
selected and why? 12+8
2022
Course: DSE 6.2A
Full Marks: 80
1. Discuss the importance of financial management.
2. Give an idea about ' Wealth maximisation ' objective of financial management.
3. Mr. M is offered either to receive ₹ 10,000 three years from now or ₹ 14,000 five years
from now. Which one Mr. M will accept? Assume rate of discount is 10 % [Given present
value of ₹ 1 at 10 % are 0.751 and 0.621 for 3rd and 5th year respectively.]
4. Explain 'working capital cycle'.
5. Coltex Ltd. issue a new 10 % Debentures of ₹ 1,000 each to be redeemed at par.
However, it will involve flotation cost of 4 %. The company is in the 35 % tax bracket. You
are required to ascertain the cost of debt.
6. The Iron Ore Ltd. consists of 4000 equity shares of ₹ 10 each. Currently these shares are
quoted in the market at ₹ 200 each. The earnings available to the equity shareholders at the
end of the period ₹ 2,40,000. The earnings are expected to grow @ 7%. What is the cost of
equity capital?
7. (a) Write a short note on Marginal Cost of Capital.
(b) Differentiate between Operating Leverage and Financial Leverage.
8. Calculate the degree of operating leverage, degree of financial leverage and combined
leverage from the following data:
Sales 100000 units @ ₹ 2 per unit = ₹ 2,00,000; Variable cost per unit @ ₹ 0.70; Fixed cost =
₹ 1,00,000; Interest charges ₹ 3,000
9. (a) Explain 'Trading on Equity' with example.
(b) What do you mean by Optimum Capital Structure?
10. ABC Ltd. sells its products on a gross profit of 20 % on sales. The following information is
extracted from its annual accounts for the current year ended 31st March, 2021.
₹
Sales at 3 months credit 40,00,000
Raw materials 12,00,000
Wages paid - average time lag 15 days 9,60,000
Manufacturing expenses paid (one month arrear) 12,00,000
Administration expenses paid (one month arrear) 4,80,000
Sales promotion expenses (payable half yearly in advance) 2,00,000
The company enjoys one month's credit from the suppliers of raw materials and maintains a
2 months stock of raw materials and one - and - half month stock of finished goods. The
cash balance is maintained at ₹ 1,00,000 as precautionary measure.
Assuming 10 % margin, find out the working capital requirement of ABC Ltd.
11. Write short notes on:

(a) Commercial Paper (b) Trade Credit as a source of short - term capital.
12. Raj and Co. Ltd. has an investment project, the particulars of which are given below:
Cost of the Asset = ₹ 1,80,000
Installation charges = ₹ 20,000
Effective working life = 10 years
Estimated scrap value = ₹ 40,000
Annual profit before depreciation = ₹ 56,000
Depreciation is charged under straight line method and the rate of tax is given as 40 %.
Compute the pay - back period of the project and state its acceptability.
13. (a) Why is discounted cash flow method superior to non - discounted cash flow method
in evaluation of an investment project?
(b) What is capital rationing?
14. The following figures are collected from the annual report of ABC Ltd.
Net Profit ₹ 60 Lakhs
Outstanding 12 % Preference Shares ₹ 200 Lakhs
Number of equity shares 300000
Return on Investment 20 %
Cost of Capital (Ke) 16 %
Compute the amount of dividend to keep the share price at ₹ 84 using Walter’s Model.
15. X Ltd. is contemplating replacement of one of its machines which has become outdated
and inefficient. Its financial manager has prepared a report of two possible replacement
machines. The details of each machine are as follows:
Machine 1 Machine 2
Initial Investment ₹ 15,00,000 ₹ 16,00,000
Estimated useful life 5 years 5 years
Residual Value ₹ 1,20,000 ₹ 1,00,000
Contribution per annum ₹ 11,60,000 ₹ 12,00,000
Fixed operating costs per annum ₹ 7,60,000 ₹ 6,90,000
Depreciation has been calculated by straight line method and has been included in fixed
operating costs. The expected cost of capital for this project is assumed as 12 % p.a.
Required: Which machine is more beneficial.
Year 1 2 3 4 5
PV @ 12% 0.893 0.797 0.712 0.636 0.567
2022
Course: DSE 6.2A
Full Marks: 80
Group – A
1. Explain the inter-relationship between financing decision, investment decision and
dividend decision.
Or,
Discuss the significance of wealth maximisation.
2. Ms. B is considering two investment proposals for an amount of 5,000 with following
details:
Return From Investment (₹.)
Proposal Maturity Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Period
D 5 years 600 600 600 600 600 N.A.
G 6 years NIL NIL 2400 NIL NIL 800
PV for re. 1 At 10% 0.909. 0.826 0.751 0.683 0.621 0.564
Suggest her for selecting the better option considering 10 % discounting rate.
3. Briefly discuss the different strategies of financing current assets with graphical
presentation.
Or,
What are the various sources of finance to meet working capital requirement?
4. Briefly explain how the risk - return trade off play a significant role in the financial
decision making.
Or,
Explain the significance of time value of money in financial decision making. Calculate
present value of a 5 years annuity of ₹ 20,000 at a discount rate 10%.
5. Cost of plant ₹ 12.25 crore. Economic life of the plant is 6 years. Salvage value is
estimated as ₹ 25 lakh. Pre - tax Profit before depreciation is expected to be ₹ 3.4 crore for
the first year. Find out the cash inflow from the plant considering 30 % corporate tax rate.
Straight line method of depreciation is accepted.
Or,
Define independent projects and mutually exclusive projects. Briefly discuss their selection
criteria based on NPV.
6. The initial outlay for a project of economic life 6 years is ₹ 72,000. The cash flow after tax
from this project for the first year is ₹ 19,500 and it increased steadily by ₹ 6,000 per
annum. Calculate payback period.
7. Explain the concept of cost of capital. What do you mean by marginal cost of capital? Why
should we consider marginal cost of capital rather than weighted average cost of capital
while evaluating a new project?
Or,
The existing capital structure of X Ltd. is as follows:
Equity Share Capital and retained earnings (Ke = 17%) ₹ 5,00,000
14 % Preference Share Capital ₹ 2,00,000
10 % Debt ₹ 3,00,000
The company wishes to implement the expansion of the plant with capital outlay of ₹
5,00,000. Besides using the available retained earnings of ₹ 1,00,000, the balance additional
fund will be raised as follows:
10 % Debt ₹ 3,00,000
14 % Preference Share Capital ₹ 1,00,000
Corporate tax rate is 20 %.
Assuming that specific cost of different components of capital remaining same, you are
required to
(a) Calculate weighted average cost of capital after the issue of fresh securities;
(b) Calculate the marginal cost of capital, and
(c) Comment on the acceptance of the expansion plan if it is expected to give a return of
12%.
8. From the following information presented by a manufacturing company, prepare a
statement showing working capital requirement for the coming year.
Expected monthly sales of 64,000 units at ₹ 20 per unit. The anticipated ratios of selling
price are:
Raw – materials ⎯ 40 %
Labour ⎯ 30 %
Budgeted overhead ₹ 32,000 per week.
Overhead expenses include depreciation of 8,000 per week. Planned stock will include raw -
materials for ₹ 1,92,000 and 32,000 units of finished goods.
Material will stay in process 2 weeks
Credit allowed to debtors is 4 weeks
Credit allowed by creditors 5 weeks.
20% of sales may be assumed to be made against cash. Cash and Bank is to be maintained at
10% of the working capital.
Assume that production is carried on evenly throughout the year and wages and overhead
accrue similarly.
Or,
What do you understand by working capital cycle? State the factors on which the duration
of working capital cycle depends. Explain the significance of working capital cycle in working
capital management.
9. The selected financial data for companies A and B for the current year ended March 31,
2022 are as follows:
Particulars Company A Company B
Variable cost as a percentage of Sales 60 75
Interest (₹) 500 800
Degree of Operating Leverage 4 5
Degree of Financial Leverage 2 3
Income tax rate 0.30 0.30
(a) Prepare income statement of Company A and

(b) Comment on the risks of the two firms.
Or,
(a) What do you mean by optimum capital structure? what are its features?
(b) Explain the net income approach to the capital structure theory.
10. B. Bakshi Co is evaluating two independent and indivisible projects SB and AKB with
following details:
Post Cash Inflows
tax (₹)
Project Investment(₹) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
SB 1,50,700 36,800 38,700 44,700 50,100 41,500 55,000
AKB 74,800 15,900 28,200 30,500 32,100 37,800 NIL
(a) Comment on the selection of the project on the basis of net present value
considering 8% discounting rate.
Year 1 2 3 4 5 6
PV for Re 0.926 0.857 0.794 0.735 0.681 0.630
.1 at 8 %
(b) Review your decision under profitability index approach and comment.
Or,
(a) Discuss the demerits of payback period approach.
(b) Discuss the effect of income tax, salvage value of assets and depreciation on cash
inflows of a project under consideration.
11. P. Mitter Ltd. is having cost of capital 10 per cent and return on investment 12 per cent.
The company earned ? as profit per share and declared 30 % dividend.
(a) Calculate the market price of equity share under Walter's model.
(b) To increase the market price per share, the management is willing to increase the
dividend pay-out ratio in the next financial year, but the CFO Mr. Tapesh has
opposed such a decision. Give your opinion in this matter.
Or,
(a) Discuss the pros and cons of scrip dividend.
(b) (b) Differentiate between constant dividend rate policy and constant dividend pay - out
policy with diagram.
2020
FINANCIAL REPORTING AND FINANCIAL STATEMENT ANALYSIS — HONOURS
Paper: DSE 6.1A
Full Marks: 80
Group - A
1. What are included in a complete set of financial statements as per Ind AS 1? 15
2. Briefly describe different concepts of fund. 15
3. Given, Current ratio = 2.8; Quick ratio = 1.9; Stock turnover (on sales) = 3 months and Sales = ₹
36,00,000. Find the value of current assets and current liabilities assuming no overdraft and
prepayments.
15
4. From the following information, prepare a comparative income statement:
31.03.2019 31.03.2020
Particulars (₹) (₹)
Revenue from operations (Sales) 3,75,000 5,25,000
Other Income 20,000 30,000
Cost of Goods sold 3,00,000 3,90,000
Administration Expenses 1,25,000 15,000
Selling and Distribution Expenses 10,000 15,000
Income Tax 30% 30% 15
Group – B
25x2
5. (a) Differentiate between Traditional and Modern Approaches to financial statement analysis.
Please
(b) From the trend percentages supplied below, prepare a comparative statement of Current Assets
in absolute value taking 2016 as the base year. 12+13
Trend Percentage Corresponding Value of Current Assets
2017 2018 2019 2019 (₹)
120 130 150 7200 - Cash at Bank
130 140 200 13600 - Debtors
160 220 250 8000 - Finished Goods
175 250 300 9000 - W.I.P.
110 150 175 3500 - Raw Materials
6. From the Balance Sheets of H. Ltd. and S. Ltd. and the Notes as at 31.03.2020, following balances
and information are available:
Particulars H. Ltd. (₹) S. Ltd. (₹)
Equity Share Capital (₹ 10 each fully paid) 8,00,000 3,00,000
General Reserve 2,00,000 80,000
Trade Payables 2,80,000 70,000
Balance of Profit and Loss Statement 2,50,000 1,00,000
Land and Building 6,00,000 3,20,000

Plant and Machinery 4,00,000 1,00,000
Investments (24,000 shares in S. Ltd.) 2,80,000 –
Trade Receivables 1,60,000 80,000
Stock 60,000 40,000
Cash and Bank 30,000 10,000
Additional information:
(a) H. Ltd. acquired 24,000 Equity Shares of S. Ltd. on 01.04.2019 at a cost of ₹ 2,80,000 and
immediately after acquisition, H. Ltd. received dividend from S. Ltd. on equity shares @ 20% for the
year 2018-19 and credited the amount to its Profit and Loss A/c.
(b) On 01.04.2019 S. Ltd. had ₹ 50,000 in General Reserve and ₹ 80,000 in Profit and Loss statement.
(c) Goods were sold by H. Ltd. to S. Ltd. at cost plus 25% and stock of S. Ltd. includes ₹ 10,000 of such
goods. You are required to prepare the Consolidated Balance Sheet of H. Ltd. with its subsidiary S. Ltd.
as at 31.03.2020. 25
7. Given below is the summary of assets and liabilities of Speed Ltd. as at 31.03.2019 and 31.03.2020
Liabilities and Equities 31.03.2019 (₹) 31.03.2020 (₹)
Equity Share Capital (₹ 10 each fully paid) 4,00,000 4,80,000
Balance of Statement of Profit and Loss 3,00,000 3,90,000
Long-term Borrowing 3,80,000 3,40,000
Trade Payables 1,70,000 1,25,000
Provision for Tax 50,000 55,000
TOTAL 13,00,000 13,90,000
Assets 31.03.2019 (₹) 31.03.2020 (₹)
Plant, Property and Equipment: Tangible 7,00,000 8,00,000
Stock in trade 2,20,000 1,40,000
Trade Receivables 2,30,000 2,80,000
Cash and Bank 1,50,000 1,70,000
TOTAL 13,00,000 13,90,000
(a) Tangible asset costing ₹ 1,00,000 (accumulated depreciation ₹ 70,000) was sold for ₹ 42,000 and
the profit or loss transferred to Profit and Loss A/c. Depreciation charged during the year on tangible
assets was ₹ 1,10,000.
(b) Income tax and Dividend paid during the year were ₹ 58,000 and ₹ 66,000 respectively.
You are required to prepare the Fund Flow Statement of Speed Ltd. for the year ended 31.03.2020.
25
8. From the following information of a company, prepare a Cash Flow Statement as per AS 3 for the
year:
Particulars 31.03.2018 (₹) 31.03.2019 (₹)
I. Equity and Liabilities:
1. Shareholders’ Fund
(a) Share Capital (Equity Shares of ₹ 100 each) 15,00,000 15,00,000
(b) Reserve and Surplus (Statement of Profit and Loss) 13,00,000 15,00,000
2. Current Liabilities 10,00,000 6,00,000
38,00,000 36,00,000
II. Assets:
1. Non-current Assets
Property, Plant and Equipment 15,00,000 18,00,000
2. Current Assets
Inventories 6,00,000 3,00,000
Trade Receivables 15,00,000 10,00,000
Cash and Cash equivalents 2,00,000 5,00,000
38,00,000 36,00,000
Additional Information:
(a) During the year company paid ₹ 2,00,000 as dividend.
(b) During the year one plant, whose book value was ₹ 1,00,000 was sold at a loss of ₹ 25,000 and
the company purchased plant for ₹ 6,00,000.
12+7+6
9. From the following information, prepare a Statement of Proprietors’ Fund with as many details as
possible:
• GP ratio = 25%
• Current ratio = 1.5
• Stock to Current Liabilities = 1/2
• Stock turnover ratio (based on cost) = 73 days [assume, 1 year = 365 days]
• Fixed assets to Net worth = 0.80
• Debtors turnover = 4 times
• Gross profit = ₹ 3,00,000
• Reserve to Share Capital = 1/3
25
10. (a) What do you mean by financial statement analysis? Discuss three objectives of financial
statement analysis.
(b) State the limitations of ratio analysis.
13+12
2020
FINANCIAL REPORTING AND FINANCIAL STATEMENT ANALYSIS — GENERAL
Paper: DSE 6.1A
Full Marks: 80
Group - A
15x2
1. What are the components of financial statements as per Ind-AS-1- Preparation of Financial
Statements?
15
2. From the following data, compute the (a) Gross profit ratio (b) Net profit ratio and (c) Operating
expenses ratio.
4+4+7
Sales ₹ 8,00,000
Cost of Goods Sold ₹ 3,00,000
Administrative and Selling expenses ₹ 2,00,000
Tax rate ------
Interest expense ------
3. From the following information, compute fund from operation.

15
Net Profit Rs. 25,000
Net Profit is calculated
after considering the following terms:
Depreciation Rs. 20,000
Loss on sale of Assets Rs. 5,000
Income from Investment Rs. 2,500
4. What is Financial Statement Analysis? State three needs of Financial Statement Analysis?
5+10
Group – B
25x2
5. (a) From the following information, calculate trend percentage taking 2017 as base year.
Year Fixed Assets Sales
2017 1,00,000 8,00,000
2018 1,50,000 10,00,000
2019 1,80,000 13,50,000
2020 2,60,000 15,80,000
(b) Distinguished between comparative Statement and Common Size Statement?

5+10
6. The Balance Sheet of H. Ltd. and S. Ltd. as at 31.03.2020 are as follows:
Particular H Ltd. (₹) S Ltd. (₹)

Liabilities and Equities:
Shareholder’s Fund:
Equity Share Capital (Rs. 10 each) 5,00,000 2,00,000
Reserve and Surplus:
General Reserve 2,00,000 1,30,000
Profit and Loss Account 2,50,000 1,00,000
Non-Current Liabilities ---- ----
Current Liabilities:
Creditors 2,80,000 1,70,000
TOTAL 12,30,000 6,00,000
Assets
Non-Current Assets:
Plant, Property and Equipment
Non-Current Investment:
Investment shares in S. Ltd. 1,60,000 -----
Current Assets:
Inventories 1,40,000 1,40,000
Debtors 1,80,000 60,000
TOTAL 12,30,000 6,00,000
Further information:
I.H Ltd. acquired 12,000 shares in S Ltd. on 01.04.2019 when the Reserve and Surplus of S Ltd., was
as under:
(i) General Reserve – Rs. 50,000
(ii) Profit and Loss – Rs. 20,000
II.Debtors of H Ltd., include Rs. 30,000 for goods supplied by H. Ltd.
Prepare a Consolidated balance Sheet of H Ltd. And its subsidiary S Ltd. as on, 31.03.2020.
25
7. From the following information, prepare the Balance Sheet of Sunny Ltd. as on 31.03.2020.
20
Current Ratio 2:1
Liquid Ratio 1.25 : 1
Fixed Assets to Proprietorship Ratio 0.75 : 1
Working Capital (Net) Rs. 8,000
Reserve and Surplus Rs. 2,000
Long term-loan ----
(Not required to follow Schedule III format of Balance Sheet)
8. The following are the Balance Sheet of Axis Ltd. as on 31.03.2019 and 31.03.2020:
H Ltd. S Ltd.
I. Equity and Liabilities:
Shareholders’ Funds:
Equity Shares Capital 6,00,000 8,00,000
Reserve and Surplus:
General Reserve 30,000 40,000
Profit and Loss 1,00,000 1,50,000
Non-Current Liabilities ---- ----
Sundry Creditors 2,50,000 2,62,0000
Outstanding Expenses 10,000 8,000
Total 10,10,000 12,95,000
II. Assets
Non-Current Assets
Property, Plant and Equipment:
Land (at cost) 4,20,000 5,35,000
Plant and Machinery (at WDV) 4,40,000 5,80,000
Current Assets:
Inventories 60,000 80,000
Debtors 50,000 40,000
Total 10,10,000 12,95,000
1. Depreciation charged during the year Rs. 80,000.
2. Dividend paid Rs. 60,000 during the year.
Prepare Cash Flow Statement under AS – 3.
25
9. From the following information, prepare a fund Flow Statement for the year ended as on
31.12.2019.
Liabilities 2018 (Rs.) 2019 (Rs.) Assets 2018 (Rs.) 2019 (Rs.)
Capital 3,00,000 3,50,000 Land and Building 2,20,000 3,00,000
Bank overdraft 3,20,000 2,00,000 Machinery 4,00,000 2,80,000
Bill payable 1,00,000 80,000 Stock 1,00,000 90,000
Creditors 1,80,000 2,50,000 Debtors 1,40,000 1,60,000
Cash 40,000 50,000
9,00,000 8,80,000 9,00,000 8,80,000
1. Net profit for the year 2019 amounted to Rs. 1,20,000.
2. During the year a Machinery having Book Value of Rs. 30,000 was sold for Rs. 26,000.
25
10. (a) Distinguish between Fund Flow and Cash Flow Statement.
(b) State the Limitations of Ratio Analysis?

12+13
2021
Paper: DSE 6.1A
Full Marks: 80
Group – A
1. From the following data relating to two companies, prepare Common Size Income
Statement for the year ended 31.03.2021 and state which of the companies is having
(i) Relating lower ‘cost of goods sold’ and
(ii) Relatively lower ‘cash operating expense’. 8+2
(Figures are in ‘000 Rs.)
Particulars Sika Ltd. Zika Ltd.
Sales 16,000 9,500
Other Income 300 200
Total (A) 16,300 9,700
Cost of Goods Sold 11,520 6,500
Cash Operating Expenses 2,400 1,700
Total (B) 13,920 8,200
EBDIT [C = (A – B)] 2,380 1,500
2. Following particulars are made available to you: 7+3

• EBIT for the year 2020 – 21 Rs.92,000 and Rate of Income Tax 25%.
• 12% Debentures Rs.1,00,000.
• Share Capital on 31.03.2021:
10% Cumulative Preference Shares of Rs.80,000 and 10,000 Equity Shares of Rs.10
each fully paid.
Calculate EPS when _
a) No equity shares were issued during the year
b) 2,400 equity shares were issued on 30.11.202.
3. Compute the following statement showing increase or decrease in Working Capital: 10

Balance of Current 31.03.2020 31.03.2021 Effect on Working
Assets & Current Capital
Liabilities Rs. Rs. Rs.
Inventory 50,000 ? 8,000 (Increase)
Trade Receivable ? 28,600 7,900 (Decrease)
Prepaid expense ? 3,900 3,600 (Increase)
Advance to supplies 12,000 ? 2,700 (Increase)
Cash & Bank 21,700 18,300 ?
Trade Payable ? 15,300 2,700 (Increase)
Outstanding 4,900 ? 400 (Decrease)

Expenses
Advance from 7,600 Nil ?
Customers
Working Capital ? ? ---
4. What do you mean by Financial Statement Analysis? Why such analysis is required?
Mention five parties who are interested in such analysis? 2+3+5
5. Calculate the average collection period from the following details taking 365 days in a
year:
Average inventory: Rs.2,73,750
Balance of Receivables: Opening Rs.2,80,000 and Closing Rs.3,04,000
Inventory turnover ratio (Based on cost) = 2 months
G. P Ratio = 10% and Credit sales to Total sales = 80% 10
6. What do you mean by Accounting Ratio? What are its Limitation? 3+7
7. Find the sales of the base year and other missing date from the following figure of Zap
Ltd
Year 2016 2017 2018 2019 2020
Sales (Rs.’000) 47,200 ? 63,200 72,800 ?
Trend 118 134 ? ? 213
10
8. (a) State the assets to which Ind AS 16: Property, Plant and Equipment does not apply.
(b) What are the conditions need to be satisfied in order to recognise the cost of an item of
properly, plant and equipment as an asset?
(c) Definite caring amount and depreciation amount as per Ind AS 16. 4+2+4
Group – B
Answer any two questions:
9. Following are the Liabilities and Assets of Amarpali Ltd. as on 31.03.2020 and
31.03.2021: 20
Particulars 31.03.2020 31.03.2021
(Rs.) (Rs.)
I. Equity and Liability:
1. Shareholders’ Funds:
(a) Equity share Rs.10 each fully paid 8,00,000 10,00,000
(b) Reserve and Surplus:

Securities Premium 1,00,000 1,20,000
Profit and Loss Balance 2,20,000 2,96,000
2. Non – Current Liabilities:

Bank Loan 4,20,000 4,60,000
3. Current Liabilities:
Trade Payable 1,66,000 2,16,000
Provision for Tax 2,00,000 2,16,000
Total 27,42,000 27,42,000
II: Assets:
1. Non – Current Assets:

(a) PPE: Tangible 17,00,000 20,60,000
(b) Non – Current Investment 96,000 1,24,000
2. Current Assets:
Inventory 2,40,000 2,30,000
Trade Receivable 1,60,000 2,40,000
Cash & Cash Equivalents 70,000 88,000
Total 27,42,000 27,42,000
(a) Dividend paid during the year Rs.75,000.
(b) The company sold part of the fixed assts fir Rs.24,000 (WDV Rs.20,000). Depreciation
charged on fixed assets during the year Rs.1,40,000.)
(c) Interest on Bank Loan accrued and paid during the year Rs.24,000.
(d) Income tax provided during the year Rs.1,98,000.
You are required to prepare the Cash Flow Statement of Amrapali Ltd. for the year ended
31.03.2021.
10. From the following information of Mr. Talapatra, prepare a Trading Account, Profit
and Loss Account for the year ended on 31.12.2020 and a Balance of Sheet as on
31.12.2020:
1
Gross Profit Ratio 33 %
3
Net Profit 25% of turnover
Stock Turnover Ratio 10 times

Current Liabilities/ External Liabilities 1
4
Fixed Assets/ Closing Capital 5

4
Closing Capital/ External Liabilities 1
2
Fixed Assets/ Current Assets 5
7
Fixed Assets Rs.40,00,000
Closing Capital is Rs.4,40,000 which is 10% more than the Opening Stock.
11. From the Balance Sheet of H Ltd. as at 31.03.2021, and the Notes on accounts thereon,
following information are made available to you: 20
Particulars H Ltd. (Rs.) S Ltd. (Rs.)
Equity Share Capital (of Rs.10 each fully paid) 10,00,000 5,00,000
Balance in Statement of Profit and Loss 7,00,000 5,00,000
Trade Payable 5,00,000 6,00,000
Total 24,00,000 19,00,000
Investment (30,000 Equity Share in S Ltd.) 4,00,000 ---
Inventories 3,00,000 4,00,000
Cash and Bank 2,00,000 1,00,000
Total 24,00,000 19,00,000
(a) H Ltd. acquired 30,000 Equity shares of S Ltd. on 01.04.2020 at a cost of Rs.4,75,000. On
September 15, 2020, S Ltd. declared 25% divided for the year ended 2019 – 20 and H Ltd.
credited the receipt of dividend to its Investment Account.
(b) On 01.04.2020 S Ltd. had Rs.2,00,000 in General Reserve and Rs.3,25,000 in Profit and
Loss Account (Cr.)
(c) Trade Payable of S Ltd. include Rs.1,20,000 for purchase of goods from H Ltd. on which H
Ltd. made a Profit of Rs.30,000. Inventories of S Ltd. includes Rs.40,000 of such goods.
You are required to prepare the Consolidated Balance Sheet of H Ltd. with its subsidiary S
Ltd. as at 31.03.2021.
12. The summarised Balance Sheet of KPC Ltd. as at 31.03.2020 and 31.03.2021 were as
follows: 20
Equity and Liabilities 31.03.2020 31.03.2021
(Rs.) (Rs.)
Equity Share Capital (Rs.10 each) 3,00,000 4,00,000

Balance in Statement of Profit and Loss 80,000 1,50,000
12% Term Loan 1,00,000 ---
Trade Payable 1,25,000 1,10,000
Total 8,00,000 9,80,000
Assets 31.03.2020 31.03.2021

(Rs.) (Rs.)
Investments 75,000 40,000
Inventories 1,46,000 2,16,000
Prepaid Expenses 15,000 32,000
Total 8,00,000 9,80,000
(a) Investment Costing Rs.35,000 were sold at a loss Rs.7,000 (the loss is transferred to
Profit and Loss Account.)
(b) Interest received on investment during current year amounted to Rs.10,000.
(c) Income Tax and Dividend paid during the year were Rs.85,000 and Rs.40,000
respectively.
(d) 12% Term Laon was repaid in full at the beginning of the year 2020 – 21.
(e) Depreciation charged during the year on Land and Building and Plant and Machinery
were Rs.20,000 and 25,000 respectively.
You are required to prepare the Funds Flow Statement of KPC Ltd. for the year ended
31.03.2021 showing the changes in the Working Capital.
2021
Paper: DSE 6.1A
Full Marks: 80
Group – A
1. Discuss the Qualitative characteristics of Financial Statements? 10
2. MP Ltd. had an outstanding Equity Share of 3,00,000 of Rs.10 each as on 31.03.2019. after
tax profit for the year was Rs.6,00,000. MP Ltd. had 5000 10% convertible debenture of
Rs.100 each to be converted into Rs.10 Equity Shares as on 31.03.2019. Tax rate is 30%.
Calculate: (a) Basis EPS
(b) Diluted EPS 4+6
3. Prepare a Statement of Changes in Working Capital from the following Balance Sheet of A
& Co. 10
Liabilities 2019 (Rs.) 2020 (Rs.) Assets 2019 (Rs.) 2020 (Rs.)
Capital 8,00,000 8,00,000 Fixed Assets 8,00,000 8,50,000
Reserve & Surplus 3,00,000 3,25,000 Long – term 2,00,000 1,50,000
Investments
Long – term Loan 2,00,000 1,50,000 Stock 2,10,000 2,28,000
Sundry Creditors 55,000 50,000 Debtor 1,85,000 1,75,000
Trade Payable 30,000 25,000 Trade Receivable 35,000 30,000
Provision for 20,000 85,000 Cash & Cash 45,000 30,000
Taxation Equivalent
Bank Overdraft 70,000
14,75,000 14,63,000 14,75,000 14,63,000
4. From the following Income Statement prepare a Common Size Income Statement: 10
Income Statement for the year ended 31st, March
Particulars 2019 (Rs.) 2020 (Rs.)
Net Sales 10,50,000 13,50,000
Less: Cost of Goods sold 5,70,000 6,45,000
Gross Profit 4,80,000 7,05,000
Less: Other Operating Expenses 1,50,000 2,16,000
Operating Profit 3,30,000 4,89,000
Less: Interest on Long – Term Debt 60,000 51,000
Profit Before Tax 2,70,000 4,38,000
5. (a) Discuss the concept of Fund in a Fund Flow Statement?
(b) Identity the following items as sources or applications of fund:
i. Purchase of Land
ii. Sale of Investment
iii. Payment of Dividend
iv. Redemption of Debenture
v. Payment of Interest 5+5
6. From the following information of Telco Ltd. for the year ended 31.03.2021, calculate
the following ratios: 10
Particulars Amount (Rs.)
Sales (Fully Credit) 2,00,000
Purchase (Fully Credit) 1,20,000
Average Creditors 40,000
Average Debtors 20,000
a) Debtors Turnover Ratio
b) Creditors Turnover Ratio
c) Debtors Collection Period
d) Creditors Payment Period
(1 Year = 360 Days)
7. Distinguished between Cash Flow Statement and Fund Flow Statement? 10
8. (a) State the objectives of Ind AS – 16?

(b) Mention any 5 items which are to be capitalised while purchasing Plant and Machinery
as per Ind AS – 16? 5+5
Group – B
Answer any two questions:
9. The Standalone Balance Sheet H Ltd. and S Ltd. as at 31.03.2021 are given below: 20
Particulars H Ltd. S Ltd.
(Rs.) (Rs.)
Equity and Liability:
(a) Share Capital
Equity Share Capital (Shares of Rs.10 each) 2,80,000 1,00,000

General Reserve 40,000 30,000
Balance of Profit and Loss (Cr.) 60,000 35,000
(a) Trade Payable
Creditors 50,000 20,000

Bills Payable 10,000 6,000
Total 4,40,000 1,91,000
Assets:
Non – Current Assets:

(a) Property, Plant and Equipment
Land and Buildings 1,50,000 60,000
Plant and Machinery 1,20,000 90,000
(b) Non – Current Investments:

6,000 shares of S Ltd. 75,000 ---
Current Assets:
(a) Inventories
Stock – in – trade 60,000 11,000
(b) Trade receivables

Debtors 15,000 20,000
(c) Cash and Cash Equivalents

Cash & Bank 20,000 10,000
Total 4,40,000 1,91,000
(a) H Ltd. acquired the shares of S Ltd. on 01.04.2020. S Ltd. had the following balances on
the date of acquisition:
(i) Profit and Loss Account Rs.25,000
(ii) General Reserve Rs.20,000
(b) On 15.08.2020 S Ltd. paid dividend for the year 2019 – 20 at 10% and H Ltd. credited its
share of dividend to P/ L A/c.
(c) S Ltd. goods of Rs. 25,000 to H Ltd. at a profit of 20% on sales. The goods are still lying
unsold.
(d) Sundry Creditors of H Ltd. include Rs.10,000 payable to S Ltd.
Prepare Consolidated Balance Sheet on 31.03.2021.
10. The Balance Sheet of Senbow Ltd. as at 31.03.2020 and 31.03.2021 are as follow: 20
Particulars 31.03.2020 31.03.2021
(Rs.) (Rs.)
Equity and Liability:
(a) Share Capital

Equity Share Capital (Shares of Rs.10 each) 4,00,000 5,00,000

Securities Premium 50,000 60,000
Balance of Profit and Loss (Cr.) 1,10,000 1,48,000
Non – Current Liabilities:

Bank Loan 2,10,000 2,40,000
(a) Trade Payable
Creditors 83,000 1,08,000
(b) Short Term Provision

Provision for Tax 1,00,000 1,05,000
Total 11,33,000 13,81,000
Assets:
Non – Current Assets:

(a) Property, Plant and Equipment 8,98,000 10,92,000
Current Assets:
(a) Inventories 1,20,000 1,40,000
Stock – in – trade
(b) Trade receivables

Debtors 80,000 95,000
(c) Cash and Cash Equivalents

Cash & Bank 35,000 54,000
Total 11,33,000 13,81,000
Additional information for the year 2020 – 21:
(a) Dividend paid during the year Rs.40,000 for the year ended 2019 – 20.
(b) Company sold part Plant for Rs.32,000 (W. D. V. Rs.20,000). Depreciation charged
Rs.76,000 during the year.
(c) Interest accrued and paid during the year on Bank Loan Rs.24,000.
(d) Income Tax paid during the year Rs.1,16,000.
Prepare Cash Flow Statement of Sendow Ltd. for the year ended 31.03.2021 as per AS – 3.
11. From the following particulars, prepare a Balance Sheet of Ananda Ltd. as at
31.03.2021 (Schedule 3 format is not required to be followed): 20
Fixed Assets to Net Worth = 8: 9
Current Ratio = 3: 1
Fixed Assets = Rs.32,00,000
Reserve included in the Proprietors’ fund = 30%
Quick Ratio = 3: 2
Cash at Bank = Rs.1,00,000
10% Term Loan =?
Bank Overdraft = Nil
Current Liabilities = Rs.3,00,000
12. (a) What do you mean by Financial Statement Analysis? Discuss its need?
(b) Distinguished between Traditional and Modern Approach to Financial Statement
Analysis?
10+10
2022
Paper: DSE 6.1A
Full Marks: 80
1. What are the underlying assumptions for preparation of Financial Statements in
accordance with the Ind-AS 1?
Or,
What are the components of financial statements as per Ind-AS 1?
2. From the following data compute Operating expenses ratio and Operating ratio.
Sales ₹ 10,00,000
Cost of goods sold ₹ 6,00,000
Administration and Selling expenses ₹ 50,000
Selling expenses ₹ 30,000
Tax Rate 30 %
Interest expenses Nil
3. From the following information compute fund from operation

Profit and Loss Balance at the beginning of the year ₹ 60,000
Profit and Loss Balance at the end of the year ₹ 1,30,000
Profit for the year is calculated after considering the following items:
Depreciation ₹ 25,000
Debenture interest ₹ 14,000
Amount transfer to General Reserve ₹ 10,000
Income from investment ₹ 2,500
Or,
What is Fund Flow Statement? Mention any two advantages for preparation of Fund
Flow Statement.
4. From the following figures of the Balance Sheet of L & T Ltd., prepare a Comparative
Balance Sheet:
Particulars 31.03.2020 (₹) 31.03.2021 (₹)
Equity Share Capital 4,00,000 5,00,000
Preference Share Capital 2,00,000 1,00,000
10 % Debentures 1,50,000 1,00,000
Reserve and Surplus 40,000 70,000
Long - term loans 2,00,000 3,00,000
Investment 2,20,000 2,50,000
Fixed Assets 5,70,000 6,30,000
Current Assets 2,80,000 3,10,000
Current Liabilities 80,000 1,20,000
5. What are the general features of financial statement as per Ind- AS1? Discuss in brief.
Or,
a. ABC Ltd. is installing a new Plant at its factory to increase the production capacity. It
has incurred the following costs:
Cost of Plant ₹ 10,30,000
Initial delivery and handling cost ₹ 40,000
Cost of Site preparation ₹ 50,000
Installation cost ₹ 40,000
Administration expenses allocated ₹ 10,000
What cost can be capitalised in the Plant and Machinery A/c in accordance with
Ind - AS 16?
b. From the following information compute Earnings Per share as per Ind - AS 33.
Ordinary shares of ₹ 10 each fully paid ₹ 12,00,000
12 % Preference shares of ₹ 10 each. ₹ 6,00,000
Profit before tax during the year ₹ 4,00,000
Corporate tax rate 40 %
6. The stand-alone Balance Sheet of H. Ltd and S. Ltd as on 31.03.2021 are as follows:
Particulars H. Ltd. (₹) S. Ltd. (₹)
EQUITY AND LIABILITIES
Shareholder’s funds:
Equity Share Capital (₹ 10 each) 6,00,000 2,00,000
Reserves and Surplus:
Balance of Profit & Loss (Cr.) 2,50,000 1,00,000
Non - current Liabilities ⎯ ⎯
Creditors 2,80,000 1,70,000
Total 13,30,000 6,00,000
ASSETS
Non - current Assets:
Property, Plant and equipment
Non - current investment
Investment shares in S Ltd. 2,60,000 ⎯
Current Assets:
Inventories 1,40,000 1,40,000
Debtors 1,80,000 60,000
Cash at Bank 50,000 30,000
Total 13,30,000 6,00,000
Further information:
a) H. Ltd. acquired 16,000 shares in S. Ltd. on 01.04.2020 when the Reserve and
Surplus of S. Ltd. was as under:
i. General Reserve – ₹ 60,000
ii. Balance of Profit & Loss (Cr.) - ₹ 70,000
b) Debtors of H. Ltd. include ₹ 40,000 for goods supplied by H. Ltd at a profit of
20% on sales.
c) The stock of S. Ltd. includes unsold transferred goods supplied by H. Ltd. ₹
30,000.
d) Land of S. Ltd. was upward revalued by 1,00,000 on the date of acquisition of
shares., but no entry was made in the books of S. Ltd.
Prepare a Consolidated Balance Sheet of H. Ltd. and its subsidiary S. Ltd. as on
31.03.2021.
7. From the following balance sheets of ABC Ltd. as on 31st December, 2020 and 2021, you
are required to prepare a Funds Flow Statement.
Balance Sheet of ABC Ltd.

Particulars Notes 31.12.2020 31.12.2021
No. (₹) (₹)
I. EQUITY AND LIABILITIES
1. Shareholders ' Funds:
(a) Share Capital 1,00,000 1,25,000
(b) Reserves and Surplus:
(i) Balance in statement of
Profit & Loss 12,000 10,000
(ii) General Reserve 15,000 18,000
2. Non - current Liabilities ⎯ ⎯
3. Current Liabilities:
(a) Trade payables:
(i) Sundry Creditors 8,000 6,500
(ii) Bills payable 1,200 1,000
(b) Short - term provision:
(i) Provision for Taxation 18,000 16,000
(ii) Provision for Doubtful debts 600 700
Total 1,54,800 1,77,200
II. ASSETS
1. Non - current Assets:
a) Property, Plant and Equipment:
i) Building 45,000 50,000
ii) Plant 40,000 38,000
b) Intangible Assets:
i) Goodwill 12,000 10,000
c) Non - current Investments 10,000 12,000
2. Current Assets:
a) Inventory 30,000 38,000
b) Trade Receivables:
i) Bills Receivables 2,000 2,500
ii) Debtors 14,000 18,000
c) Cash and cash equivalents 1,800 8,700
Total 1,54,800 1,77,200
The following additional information have been given:

(a) Depreciation charged on plant was ₹ 4,000 and on building was ₹ 5,000.
(b) A plant book value of which was ₹ 5,000 was sold at 6,000.
(c) Provision for taxation of ₹ 19,000 was made during the year.
(d) Interim dividend of ₹ 8,000 was paid during the year.
Or,
The Balance Sheet of Adani Ltd. as at 31.03.2020 and 31.03.2021 are as follows:
Particulars 31.03.2020(₹) 31.03.2021(₹)
EQUITY AND LIABILITIES
Shareholders ' Funds:
(a) Share Capital:
Equity Share Capital (Shares of 10 each) 3,00,000 4,00,000
(b) Reserves and Surplus:
Security Premium 40,000 60,000
Profit & Loss A/c. 1,00,000 198,000
Non - current Liabilities: ⎯ ⎯
Bank Loan 2,10,000 1,20,000
a) Trade Payables:
Creditors 80,000 100,000
b) Short - term Provision:
Provision for tax 90,000 105,000
Total 10,20,000 12,03,000
ASSETS
Non - current Assets
a) Property, Plant and equipment:
Current Assets:
a) Inventories:
Stock-in-trade 1.10,000 1.50,000
b) Trade Receivables:
Debtors 90,000 55,000
c) Cash and cash equivalents:

Total 10,20,000 12,03,000
Additional information for the year 2020-21:

a) Final Dividend paid during the year ₹ 60,000 for the year 2019-20.
b) Company sold part of plant for ₹ 64,000 (W.D.V. ₹ 40,000). Depreciation charged ₹
1,06,000 during the year.
c) Interest accrued and paid during the year on Bank Loan ₹ 36,000.
d) Income Tax paid during the year ₹ 96,000.
e) Interim dividend paid 15,000
Prepare Cash Flow Statement of Adani Ltd. for the year ended 31.03.2021 as per AS–3
(under Indirect method).
8. From the following particulars, prepare a summarised balance sheet as at 31st
December 2021. [Schedule 3 format is not required to be followed]
Non-current Assets to Network 0.8:1
Current Ratio 3:1
Reserve included in proprietors fund 25%
Acid Test Ratio 3:2
Non-current Assets ₹ 16,00,000
Cash and Bank Balance ₹ 30,000
Current Liabilities 3,00,000
The firm has no Bank overdraft.
Or,
a) What is the meaning of financial ratio? Mention ratios which are used to evaluate the
following position of the firm (at least one in each case).
i) Short - term liquidity
ii) Long - term solvency
iii) Profitability
iv) Activity or Efficiency
b) Discuss the limitations of accounting ratios?
2022
Paper: DSE 6.1A
Full Marks: 80
1. Specify three purposes of conceptual framework for preparation and presentation of
financial statements of a company.
Or,
Explain understandability "and" comparability ' qualitative characteristics of financial
statements.
2. From the following information, calculate fund from operation of Exe Ltd. Profit before
tax (PBT) ₹ 2,40,000; Bad debt written off ₹ 12,000; Office expenses charged ₹ 37,000;
Depreciation charged ₹ 32,000; Provision for tax debited to Statement of Profit & Loss ₹
44,000; Dividend paid ₹ 20,000; Profit on sale of asset credited ₹ 15,000 and Goodwill
amortized ₹ 25,000.
3. From the following calculate ROCE and Return on Net Worth: Share Capital ₹ 30,00,000;
General Reserve ₹ 15,00,000; Balance of Statement of Profit & Loss ₹ 5,00,000; 15 %
long term Loan ₹ 30,00,000; PBT ₹ 17,50,000. Ignore tax.
Or,
Name the ratio that you would calculate in each of the following cases to indicate:
(a) The ability of the company to meet its current obligations.
(b) The rapidity with which accounts receivables are collected.
(c) The ability to meet interest (and other fixed charges) obligations.
(d) The profitability of equity funds invested in the firm.
(e) The dividend paid in relation to earnings per share.
4. From the following information relating to Simplex Ltd., calculate Basic EPS and Diluted
EPS as per Ind AS 33:
Net profit (after tax) for the current year ⎯ ₹ 3,00,00,000
No. of outstanding equity shares ⎯ 50,00,000 shares of ₹ 10 each
No. of 10 % Fully Convertible Debentures ⎯ 50,000 debentures of ₹
100 each
12 % Cumulative Preference shares ⎯ 50,000 shares of 100
each
Corporate tax rate 30 %
Each fully Convertible Debenture will be converted into 8 equity shares of ₹ 10 each.
5. From the following information prepare a ‘Common size Income Statement‘ for the year
ended 31st March 2022 :
Office, Selling and Distribution Expenses ₹ 1,20,000
Total Cost of Sales 75 % of Net Sales
Net profit before tax ₹ 2,40,000
Other income ₹ 40,000
Or,
Find the sales of the base period and other missing data from the following figures of S Ltd.
Year 2017 2018 2019 2020 2021
Sales (₹ in ' 000) 1980 ? 2805 3140 3798
Trend (%) 110 130 ? ? ?
6. The statement of assets and liabilities of H Ltd. and its subsidiary S Ltd. as on 31.03.2022
stored as follows:
Equity and Liabilities H Ltd (₹) S Ltd (₹)

Equity share capital (₹ 10) 10,00,000 3,00,000
Balance of Profit & Loss (Cr.) 5,00,000 2,00,000
Trade Payables (Creditors) 5,60,000 3,40,000
24,60,000 11,00,000
Assets
Land & Building 10,00,000 4,40,000
Plant & Machinery 4,00,000 2,00,000
Investment in S Ltd. 3,00,000 ⎯
Inventories 3,80,000 2,80,000
Trade Receivables (Debtors) 3,20,000 1,60,000
Cash and Cash Equivalents 60,000 20,000
24,60,000 11,00,000
The following information is also available:

(a) H Ltd. acquired 24,000 equity shares of S Ltd. on 01.07.2021 at a cost of ₹ 3,00,000
and immediately after acquisition H Ltd. received dividend an equity shares @ 20 %
for the year 2020-21. H Ltd. credited its share of dividend to Profit & Loss A/c.
(b) On 01.04.2021, the balance of General Reserve was ₹ 1,40,000 and the balance of
Profit & Loss was ₹ 80,000.
(c) Debtors of H Ltd. include ₹ 40,000 for goods sold to S Ltd. at cost plus 25 %, half
of the goods are still in stock.
Prepare Consolidated Balance Sheet of H Ltd. with its subsidiary S Ltd. as on 31.03.2022
7. Balance Sheet of Pixel Ltd. as at 31.03.2021 and 31.03.2022 were as follows:

Particulars 31.03.21 31.03.2022
₹ ₹
I. Equity and Liabilities
1. Shareholders ' Fund

a) Share Capital (Equity Shares of 10 each) 40,00,000 50,00,000
b) Reserves and Surplus (Balance in Statement of 15,00,000 21,00,000
Profit & Loss)
2. Non - Current Liabilities
a) Long term borrowing - Term Loan 15,00,000 10,00,000
3. Current Liabilities
a) Trade payables 8,00,000 5,00,000
b) Provision for Tax 2,80,000 3,50,000
80,80,000 89,50,000
II. Assets
1. Non - Current Assets
a) Property, Plant and Equipment 45,00,000 52,00,000
2. Current Assets
a) Inventories 10,00,000 12,00,000
b) Trade Receivables 23,00,000 19,00,000
c) Cash and Cash equivalents 2,80,000 6,50,000
80,80,000 89,50,000
(a) During the year the company paid income tax ₹ 3,20,000, Dividend ₹ 4,00,000 and
repayment of term loan of ₹ 5,00,000. The company also paid interest on term loan for the
year 2021-22 ₹1,80,000.
(b) Depreciation charged on property, plant and equipment during the year is ₹ 5,00,000.
Prepare a Cash Flow Statement as per AS - 3 for the year ended 31.03.2022.
Or,
Prepare a Fund Flow Statement of Y Ltd. from the following statement of assets and
liabilities after taking into consideration the additional information.
Particulars 31.03.2021 31.03.2022

₹ ₹
1. Equity and Liabilities
Share capital (₹ 10) 12,00,000 16,00,000
Capital Reserve ⎯ 40,000
Balance in statement of P / L 8,40,000 10,60,000
Debentures 8,00,000 5,60,000
Sundry creditors 4,80,000 5,36,000
Provision for tax 4,80,000 4,84,000
38,00,000 42,80,000
2. Assets
Property, plant and Equipment 22,80,000 26,40,000
Trade investment 4,00,000 3,20,000

Current Assets including inventories 11,20,000 13,20,000
38,00,000 42,80,000
Additional Information:
a) Sold one machine for ₹ 1,00,000, the cost of the machine was ₹ 2,56,000 and the
depreciation provided for it amounted to 1,40,000.
b) Provided 3,80,000 on depreciation.
c) Redeemed 30 % debentures @ ₹ 103.
d) Sold trade investment at profit and the profit was credited to capital reserve.
e) Decided to value the stock at cost, whereas the previous practice was to value
the stock at cost less 10 %. The stock according to books on 31.03.2021 was ₹
2,16,000, stock on 31.03.2022 ₹ 23,00,000 was correctly valued at cost.
8. From the following information, prepare a Statement of Proprietors' Fund with as many
details as possible:
• GP ratio = 25 %
• Current ratio 1.5
• Stock to Current Liabilities = 1/2
• Stock turnover ratio (based on cost) = 73 days
• Fixed assets to Net worth = 0.80
• Debtors turnover = 4 times
• Gross profit = ₹ 3,00,000
• Reserve to Share Capital = 0.25
• Non - trade investment ₹ 70,000
• There is no borrowings.

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MATHUR SIR CLASSES – HOWRAH | GIRISH PARK – 7003165955 | 8100254884

8. Details regarding three companies are given below:

Rate of Tax is 40%

10. Write Short notes on the following: 13+12

4. (a) What do you mean by Capital Budgeting?

5. The following data relate to a firm:

6. Discuss the features of Optimum Capital Structure. 10

8. Discuss the Role of Debenture in Company Financing. 10

9. RIL Ltd. opts for the following capital structure:

Analysis of Selling Price:

Time lag (on average):

12. (a) Compute the Pay-back Period for the project:

4. (a) Calculate the Payback Period from the following information:

6. Discuss the various sources of finance to meet working capital requirement? 10

8. You are given the following information in respect of ABC Ltd.

(b) Discuss the significance of Operating Leverage and Financial Leverage? 10

11. Write short notes on:

(a) Prepare income statement of Company A and

Land and Building 6,00,000 3,20,000

3. From the following information, compute fund from operation.

(b) Distinguished between comparative Statement and Common Size Statement?

6. The Balance Sheet of H. Ltd. and S. Ltd. as at 31.03.2020 are as follows:

Particular H Ltd. (₹) S Ltd. (₹)

(b) State the Limitations of Ratio Analysis?

2. Following particulars are made available to you: 7+3

3. Compute the following statement showing increase or decrease in Working Capital: 10

Outstanding 4,900 ? 400 (Decrease)

(b) Reserve and Surplus:

2. Non – Current Liabilities:

1. Non – Current Assets:

Stock Turnover Ratio 10 times

Fixed Assets/ Closing Capital 5

General Reserve 1,30,000 2,30,000

Assets 31.03.2020 31.03.2021

1. Discuss the Qualitative characteristics of Financial Statements? 10

7. Distinguished between Cash Flow Statement and Fund Flow Statement? 10

8. (a) State the objectives of Ind AS – 16?

(b) Reserve and Surplus:

Creditors 50,000 20,000

Non – Current Assets:

(b) Non – Current Investments:

(b) Trade receivables

(c) Cash and Cash Equivalents

(a) Share Capital

(b) Reserve and Surplus:

Non – Current Liabilities:

(b) Short Term Provision

Non – Current Assets:

(b) Trade receivables

(c) Cash and Cash Equivalents

3. From the following information compute fund from operation

Balance Sheet of ABC Ltd.

The following additional information have been given:

c) Cash and cash equivalents:

Additional information for the year 2020-21:

Equity and Liabilities H Ltd (₹) S Ltd (₹)

The following information is also available:

7. Balance Sheet of Pixel Ltd. as at 31.03.2021 and 31.03.2022 were as follows: