Seat No.: ________ Enrolment No.

___________

GUJARAT TECHNOLOGICAL UNIVERSITY

MBA - SEMESTER– I EXAMINATION – WINTER 2019
Subject Code: 2810001 Date: 24-12-2019
Subject Name: Accounting for Managers
Time: 10:30 AM TO 1.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1(A) Question text and Option. 06
1) Financial Accounting is recording and classifying of _____________
A. Transactions B. Religious Activities
C. Social Activities D. Cultural Activities
2) The journal is prepared as per ____________
A. Single Entry System B. Double Entry System
C. Rules of Audit D. None of Above
3) If a company has contingent liabilities, they appear in the __________
A. Balance sheet B. Director’s Report
C. Foot note down the balance sheet D. Chairmen’s Report
4) Accounting in India is Governed by _____________
A. Reserve Bank of India B. Company Law Board
C. Institute of Chartered Accountants of India D. Income Tax Department
5) A ‘debtors’ is the term used in ____________
A. Credit Sale of Goods B. Credit Purchase of Goods
C. Cash Sale of Goods D. Cash purchase of Goods
6) Calls in advance is shown under ___________
A. Share Capital B. Current Liabilities
C. Depreciation D. Loans And Advances
Q.1(B) Write a note on Capital Expenditure and Revenue Expenditure. 04
Q.1(C) What is Ledger? Explain with an importance of Ledger in Financial Accounting. 04

Q.2 (A) Explain Various concepts and conventions which influence preparation of financial statements. 07

Q.2 (B) Journalize the following transactions in the books of Mr. Suresh 07
2014
st
1 July Commenced business with cash borrowed from Vijaya Bank Rs. 6000
8th July Bought goods worth Rs. 4000 from P. Setty and Paid Cash Rs. 2500
13th July Received an account payee cheque from Dwarknath Rs. 1800
16th July Goods worth Rs. 3200 sold to Rajani and Received Cash of Rs. 2000
20th July Paid to Mahesh Rs. 1400 and Received discount Rs. 100
25th July Sent money order to Jayanth Rs. 1000 and Paid Commission Rs. 50
27th July Bank charges charged by Bank Rs. 150

OR

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Q.2 (B) Tetra Ball Bearings Ltd. Purchased machinery for Rs. 125000 on 1st April 2008. The 07
depreciation is to be charged at 10% by straight line method. The machinery was sold for Rs.
62500 on 1st October 2011. You are required to prepare Machinery Account assuming year
ending 31st March every year.

Q.3 (A) Define the term ‘Investment’ as per AS-13 and explain the methods of valuation in financial 07
statement.
Q.3 (B) Write a specimen of vertical form of profit and loss account. 07
OR
Q.3 (A) Explain the meaning of Inventory. What are the objectives of Inventory? 07

Q.3 (B) Following is the history of receipts and issues of raw materials in Nitin Ltd during April 07
2015.
April-1 Opening balance 500 units at Rs. 25 per unit
April-3 Issued 70 units
April-4 Issued 100 units
April-8 Issued 80 Units
April-13 Purchased 200 units at Rs. 24.50 per unit
April-14 Return of Surplus 15 units at Rs. 24 per unit
April-16 Issued 180 units
April-20 Purchased 240 units at Rs. 24.40 per unit
April-24 Issued 304 units
April-25 Purchased 320 units at Rs. 24.30 per unit
April-26 Issued 112 units
April-27 Return of Surplus 12 units at Rs. 24.50 per unit
April-28 Purchased 100 units at Rs. 25 per unit and paid freight charges Rs. 200

The stock verification reveals that on the 15th April 2015 there was a shortage of 5 units and
on 27th April 2015 another shortage of 8 units.
You are required to prepare stores ledger under FIFO Method.
Q.4 (A) Define financial statement analysis in detail. What are the advantages and limitations of 07
financial statement analysis?

Q.4 (B) Following is the details of M/S BSL as on 31/03/2013 and 31/03/2014. You are required to 07
prepare the common size income statement for the year ending 31/03/2013 and 31/03/2014
and comment on the financial position of the concern.

Particulars 31/03/2013 31/03/2014

Sales 350000 450000
Cost of Gods Sold 275000 400000
Operating Expenses 11000 22500
Office Expenses 4500 15000
Selling Expenses 2500 3000
Distribution Expenses 1250 1000
Financial Expenses 10000 12500
Tax Rate is 35%
OR
Q.4 (A) Discuss the uses and Limitations of Financial statements in Detail. 07

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Q.4 (B) Below given Profit and Loss Account of M/s trendy Apparels Ltd. Year ended on 31st March 07
and Prepare Trend Analysis statement.

Particulars 2007 2008 2009 2010 2011

Net Sales 500000 600000 700000 800000 900000
Less: Cost of Goods Sold (-350000) (-450000) (-500000) (-550000) (-650000)
Gross Profit 150000 150000 200000 250000 250000
Less: Operating expenses
Administrative Charges (-25000) (-30000) (-40000) (-45000) (-50000)
Financial Charges (-20000) (-20000) (-20000) (-20000) (-20000)
Seles & Distribution Exp. (-20000) (-30000) (-30000) (-50000) (-75000)
Operating Profit 65000 80000 90000 115000 145000
Add: Non Operating 5000 10000 -- 5000 15000
Income
Less: Non Operating Exp. (-10000) -- (-10000) -- --
Net Profit Before Tax 60000 90000 80000 120000 160000
Less: Taxes (-21000) (-31500) (-28000) (-42000) (-56000)
Net Profit After Tax 39000 58500 52000 78000 104000
Add: Opp. Balance in P&L -- 39000 97500 149500 227500
A/c
Closing Balance C/F 39000 97500 149500 227500 331500

Q.5 From the following figures extracted from the books of shri Govind, you are required to 14
prepare a Trading and Profit and Loss Account for the year ended 31st March 1998 and a
Balance Sheet as on that date after making the necessary adjustments:
Particulars Amount Particulars Amount
Rs. Rs.
Shri Govind’s Capital 228800 Stock on 1-4-97 38500
Shri Govind’s Drawings 13200 Wages 35200
Plant and Machinery 99000 Sundry Creditors 44000
Freehold Property 66000 Postage and Telegrams 1540
Purchases 110000 Insurance 1760
Returns Outwards 1100 Gas and Fuel 2970
Salaries 13200 Bad Debts 660
Office Expenses 2750 Office Rent 2860
Office Furniture 5500 Freight 9900
Discount A/c (Dr.) 1320 Loose Tools 2200
Sundry Debtors 29260 Factory Lighting 1100
Loan to Shri Krishna at Provision for D/D 880
10%p.a.balance on 1-4-97 44000 Interest on loan to Shri Krishna 1100
Cash at Bank 29260 Cash on Hand 2640
Bills Payable 5500 Sales 231440
Adjustments:
1. Stock on 31st March 1998 was valued at Rs. 72600.
2. A new machine was installed during the year costing Rs. 15400, but it was not recorded
in the books as no payment was made for it. Wages Rs. 1100 paid for its erection has
been debited to wages account.
3. Depreciate: Plant and machinery by 33.33%, Furniture by 10% and Freehold Property
by 5%.
4. Loose tools were valued at Rs. 1760 on 31-03-1998.
5. Of the sundry debtors Rs. 600 are bad and should be written off.
6. Maintain a provision of 5%on sundry debtors for doubtful debts.
7. The manager is entitled to a commission of 10% of the net profit after charging such
commission.
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 OR
Q.5 The following are the summaries of the balance sheets of the Bharat Vijay Ltd. as on 14
31/12/2002 and 31/12/2003.

Liabilities 2002 2003 Assets 2002 2003

Rs. Rs. Rs. Rs.
Share Capital 300000 400000 Buildings 120000 250000
Debenture 200000 250000 Machinery 300000 260000
Profit & Loss A/c 40000 60000 Stock 90000 80000
Creditors 70000 80000 Debtors 140000 240000
Bank Overdraft 25000 25000 Prepaid Expenses 15000 25000
Provision for Tax 30000 40000
665000 855000 665000 855000

The following additional information is obtained:

1. The net profit for the year was Rs. 40000 after charging depreciation.
2. During the year depreciation charged Rs. 30000 on building and Rs. 40000 on Machinery.
3. The company purchased during the year buildings worth Rs. 160000.
4. Dividend paid during the year amounted to Rs. 20000
From the above information, prepare Fund Flow Statement for the year 2003.

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