SRN

1st Semester MBA Semester End Examination July 2023

Course Title: Accounting for Managers
Course Code: M22MK0102 - 89552
Time: 3 Hours Max. Marks: 100
Instructions: 1. Students must check the course title and course code before answering the question paper
2: Answer ONE FULL question from Section A to D and Section E is Compulsory.
Section A Marks
1. a) Explain the need and functions of Financial Accounting. 5
b) Who requires financial information? How it will helpful for them. 5
c) Journalize the following transactions in the books of M/s Kothari & Sons, post them into 10
Cash ledger for April 2021:
Apr. 1: Commenced business with Rs. 40,000.
Apr. 4: Bought goods for cash Rs. 4,000
Apr. 7: Sold goods Rs. 700
Apr. 10: Bought goods from M/s Bhandari Bros. Rs. 3,000 at 10% trade discount.
Apr. 14: Purchased machinery of Rs. 5,000 from M/s Kirloskar Bros.
Apr. 16: Paid for transportation of machinery Rs. 500 & installation charges Rs. 300 on it.
Apr. 20: Paid quarterly interest on borrowed amount of Rs. 5,000 at 12% p.a.
Apr. 24: Supplied goods to M/s Kunal & Sons Rs. 3,500.
Apr. 27: Paid to M/s Bhandari Bros. Rs. 2600 in full settlement of account.
Apr. 28: M/s Kunal & Sons returned goods worth Rs. 300 & paid for Rs. 1,200 on account.
Apr. 29: Received commission Rs. 250.
Apr. 30: Paid conveyance to manager Rs. 450
OR
2. a) Explain different types of accounts with their rules for recording. 5
b) From the following balances, taken from the books of M/s Dwarka Parshad & Sons as at 5
31st March 2020, prepare a Trial Balance in proper form :−
Name of Accounts (Rs.) Name of Accounts (Rs.)
Cash in Hand 4,500 Machinery 24,000
Bank Overdraft 8,000 Land & Buildings 50,000
Opening Stock 20,000 Debtors 18,400
Purchases 80,000 Creditors 8,500
Purchases Returns 2,000 Bills Receivable 2,850
Sales 1,30,000 Bills Payable 1,650
Sales Returns 5,000 Capital 60,000
Travelling Expenses 1,800 Drawings 6,000

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 Discount Allowed 600 Rent 3,700
Discount Received 1,500 Salaries 3,600
Loan (Cr.) 10,000
Interest on Loan 1,200
c) “Accounting is language of the business and like other languages, it is based on certain 10
principles”. Explain briefly these various accounting principles and their relevance in
accounting system.
Section B
3. a) Explain in detail about the significance of the financial statements. 5
b) Prepare Accounting Equation from the following :− 5
1. Started business with cash ₹ 75,000 and goods ₹ 25,000.
2. Paid for Rent ₹ 2,000.
3. Bought goods for cash ₹ 30,000 and on credit for ₹ 44,000.
4. Goods costing ₹ 50,000 sold at a profit of 25%, out of which ₹ 27,500 received in Cash.
5. Purchased a Motor-cycle for personal use ₹ 20,000.
c) Fine products Ltd. was registered with a nominal capital of Rs. 5,00,000 divided into 10
shares of Rs. 100 each. The following trial balance is extracted from the books on 31 st
March, 2022.
Dr. Balance Rs. Cr. Balance Rs.
Buildings 2,90,000 Sales 5,20,000
Machinery 1,00,000 Salaries outstanding 2,000
Closing stock 90,000 Provision for bad debts 3,000
(1/4/2021)
Purchases (Adjusted) 2,10,000 Share capital 2,00,000
Salaries 60,000 General reserve 40,000
Directors fees 10,000 Profit and loss 25,000
Rent 26,000 Creditors 92,000
Depreciation 20,000 Provision for 50,000
depreciation on
buildings
Bad debts 6,000 Provision for 55,000
depreciation on
Machinery
Interest accrued on 2,000 14% Debentures 2,00,000
investment
Investment (12,000 1,20,000 Interest on debentures 14,000
shares of A Ltd. of Rs. accrued but not due
10 each)
Debenture interest 28,000 Interest on investment 12,000
Loose tools 23,000 Unclaimed dividend 5,000
Advance tax 60,000

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 Sundry expenses 18,000
Debtors 1,25,000
Cash at Bank 30,000
12,18,000 12,18,000
You are required to prepare statement of profit and loss for the year ending 31 st March,
2022 and balance sheet as at that date after taking into consideration the following
adjustments.
1. Closing stock is more than opening stock by Rs. 30,000.
2. Provide for bad and doubtful debts @ 4% on debtors.
3. Make a provision for income tax @ 50%.
4. Depreciation expenses include depreciation of Rs. 8,000 on buildings and that of
Rs. 12,000 on machinery.
5. The directors recommended a dividend @ 25%.
6. Transfer minimum required amount to general reserve.

OR
4. a) Explain the limitations of financial statements. 5
b) You are given the following extracts of ledger balances taken from Ashirvad Co. Ltd.,for 5
the year ending 31 March, 2015.
Prepare P & L A/c as per revised schedule III of the companies Act.
Particulars Rs.
Closing stock 50,000
Sales 4,25,000
Purchases 3,00,000
Bonus to workers 27,500
Discount received 3,150
Opening stock 91,500
Discount allowed 4,200
Insurance 3,040
Consumables 2,600
Trade marks 8,000
Repairs 6,950
Printing & stationery 2,400
Interest on debenture 8,500
Depreciation machinery 7,200
Machinery 80,000
Rent from sub-let 36,000
Loss by fire 4,700
Wages 65,000

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 c) Mohit has the following transactions, prepare Accounting Equation: 10
(₹)
(1) Business started with cash 1,75,000
(2) Purchased goods from Rohit 50,000
(3) Sold goods on credit to Manish (costing ₹ 17,500) 20,000
(4) Purchased furniture for office use 10,000
(5) Cash paid to Rohit in full settlement 48,500
(6) Cash received from Manish 20,000
(7) Rent paid 1,000
(8) Cash withdrew for personal use 3,000

Section C
5. a) Discuss the essentials of effective budgeting system. 5
b) Prepare a production budget for 3 months ending 31-3-1998 for a factory producing 5 5
products, on the basis of the following information.
Product Opening stock Budgeted sales closing stock
s (in units) (in units) (in units)
A 5,000 20,000 4,000
B 6,000 25,000 6,000
C 10,000 50,000 11,000
D 1,000 10,000 1,000
E 2,000 5,000 5,000
c) The cost of an article at a capacity level of 5,000 units is given under A below. For a 10
variation of 25% in capacity above or below this level, the individual expenses vary as
individual expenses vary as indicated under B below:
A B
Rs. Rs.
Material cost 25,000 (100% varying)
Labour cost 15,000 (100% varying)
Power 1,250 (80% varying)
Repairs and maintenance 2,000 (75% varying)
Stores 1,000 (100% varying)
Inspection 500 (20% varying)
Depreciation 10,000 (100% varying)
Administration overheads 5,000 (25% varying)
Selling overheads 3,000 (25% varying)
62,750
Cost per unit Rs.12.55; Find the unit cost of the product at production levels of 4,000 units
and 6,000 units.

OR
6. a) Differentiate between flexible budget and fixed budget. 5
b) Explain the advantages of budgetary control system. 5

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 c) A company expects to have Rs.25,000 in bank on 1st may 2020 and requires you to 10
prepare an estimate of cash position during the three months-May, June and July 2020.
The following information is supplied:

Month Sales Purchases Wages Office Factory Selling

expenses expenses expenses
March 50,000 30,000 6000 4000 5000 3000
April 56,000 32,000 6500 4000 5500 3000
May 60,000 35,000 7000 4000 6000 3500
June 80,000 40,000 9000 4000 7500 4500
July 90,000 40,000 9500 4000 8000 4500
Other information:
1. 20% of sales are in cash, remaining amount is collected in the month following
that of sales.
2. Supplier supply goods at two months’ credit.
3. Wages and all other expenses are paid in the month following the one in which
they are incurred.
4. The company pays dividend to shareholders, and bonus to workers of Rs. 10,000
and Rs. 15,000 respectively in the month of May.
5. Plant has been ordered and is expected to be received in June. It will cost Rs.
80,000 to be paid in June.
6. Income tax Rs. 25,000 is payable in July.
Section D
7. a) Write a note on social accounting and environmental accounting. 5
b) What is window dressing in accounting? Discuss the ways to check window dressing. 5
c) Explain the various methods of human resource accounting and its benefits. 10
OR
8. a) Explain the Need and benefits of corporate Governance. 5
b) What is cloud based accounting? Explain benefits of cloud accounting software. 5
c) What are the steps involved in forensic accounting assignment? Briefly discuss the need 10
and scope of Forensic Accounting.
Section E Case Study (Compulsory Question)
9. a) From the following forecast of income and expenditure of Golden co. ltd, Prepare a cash 20
budget for 6 months commencing from 1st June 2018 when the bank balance is estimated
to be Rs.1,10,000.

Month Sales Selling Purchases Wages Factory Admn. Research

overh Overhe Overh expendit
eads ads eads ure
March 82,000 5,000 40,000 10,000 8,400 3,400 2,000
April 88,500 3,250 37,000 8,000 5,680 2,500 2,400
May 84,000 4,100 40,000 8,400 5,920 2,760 2,400
June 93,000 3,710 39,000 8,800 5,440 2,480 2,400
July 72,000 3,210 39,900 6,000 5,880 2,600 2,400
Aug 82,500 3,600 35,000 9,600 6,000 2,520 2,600

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 Sept 98,600 3,450 36,400 8,000 5,680 2,700 2,600
Oct 92,800 3,210 36,574 8,400 5,360 2,560 2,600
Nov 1,04,400 3,200 32,800 7,600 5,850 2,620 2,400

Lag in payment of wages ¼ month

Lag in payment of Factory overhead 1 month
Lag in payment of administrative overhead ½ month
Lag in payment of selling overhead 1 month
Lag in payment of research expenses 1 month
Period of credit allowed by creditors 3 months
Period of credit allowed by debtors 2 months
Other information: -
i. A sales commission of 5% on sales and due 2 months after sales, is payable in
addition to selling overheads.
ii. Capital expenditure planned is (a) plant purchased in June 2018 for Rs.1,00,000
payable on delivery, and (b) Building purchased in June 2018 for Rs. 800,000
payable in four half-yearly installments, the first being payable in July 1983.
iii. Interest on Bombay port trust bonds amounting to Rs.50,000 is to be received in
October 2018.
iv. Cash sales are estimated at Rs.2,000 per month.
v. A dividend of Rs.10,000 is to be paid in September 2018.
vi. Tax amounting to Rs.30,000 is to be paid on 1st Aug. 2018.
vii. A call of rs.2 per share on equity share capital of Rs.5,00,000 divided in to 50,000
shares of Rs.10 each is to be received on 1st July 2018.

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