SRN

1st Semester MBA Semester End Examination September 2023

Course Title: Accounting for Managers
Course Code: M21MK0102-89402
Time: 3 Hours Max. Marks: 100
Note: 1.Answer ONE FULL question from Section A to D and Section E is Compulsory.
2. Ensure that question paper is completely printed.
3. Students must check the course title and course code before answering the question paper
Time value tables may be provided
Section - A Marks
1. a) State and explain Accounting conventions with examples. 5
b) Explain different Types of Accounting. 5
c) The following balances were extracted from the ledger of Mr.Sachin as on 31st March 2021. 10
You are required to prepare a trial balance as on that date.
Balances ₹
Drawings 60,000
Salaries 95,000
Capital 4,40,000
Sales return 10,000
Sundry creditors 2,30,000
Purchases return 11,000
Bills payable 40,000
Commission paid 1,000
Sundry debtors 5,00,000
Trading expenses 25,000
Bills receivable 52,000
Discount earned 5,000
Plant & Machinery 45,000
Rent 20,000
Opening stock 3,70,000
Bank overdraft 60,000
Cash in hand 9,000
Purchases 7,08,000
Cash at bank 25,000
Sales 11,80,000
Investment 46,000
Closing Stock 80,000.

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 OR
2. a) Explain the Role of Accounting in Business. 5
b) State and explain Accounting concepts. 5
c) On 1st April, 2021, Mohit started business with a capital of ₹ 50,000. He made the following 10
transactions:
2021
April 03 Purchased good from Rita on credit for 20,000
April 04 Cash paid to Rita 10,000
April 06 Goods sold to Rohit 25,000
April 08 Cash received from Rohit 20,000
April 12 Goods purchased from Rita 12,000
April 18 Cash paid Rita 20,000
April 25 Goods sold to Rohit 10,000
April30 Received cash from Rohit 6,000
You are required to journalise the above transactions and show the respective Ledger
accounts.
Section - B
3. a) What is mean by Financial statements? Explain objectives of financial statement. 5
b) From the fallowing trail balance of Kumar co ltd., as on 31/3/2021 prepare a statement of 5
P&L Accounts as per Schedule III of companies act
Bad debts 10,000
Conveyance 12,000
Loss on sale of machinery 14,000
Employee benefits expenses 15,000
Insurance 15,000
Closing stock 75,000
Depreciation and amortization expenses 10,000
Purchase of stock in trade 50,000
Opening stock 50,000
Cost of material 50,000
sales 5,00,000
Tax during the year 35,000
Other income 10,000
c) Premier company Ltd. Had an authorized capital of 6, 00,000 in equity share of 10 each. Its 10
trial balance as on 31/3/2021 is given below.
Calls in Arrears 7,500
Premises 3,00,000
Plant and machinery 3,30,000
Interim dividend (including corporate dividend tax ) 37,500
Stock(1/4/2020) 75,000
fixtures 7,200
Debtors 87,000
goodwill 25,000
Cash in hand 760
Cash at bank 39,900

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 purchases 1,85,000
Preliminary expenses 5,000
Wages 84,865
General expenses 16,835
Freight and carriage 13,115
Salaries 14,500
Directors fees 5,725
Bad debts 2,100
Debenture interest paid 9,000
Called up capital 4,00,000
6% debenture 3,00,000
P&L account (1/4/2020) 14,500
Bills payable 38,000
Creditors 50,000
sales 4,15,000
General reserve 25,000
Bad debts (1/4/2020) 3,500

Adjustments:
1. Depreciation on plant and machinery 10%.
2. Write-off preliminary expenses 500
3. Provide for debenture interest due
4. Of the debtor 500 are further bad
5. Provide for reserve for doubtful debt at 5% on debtors.
6. Closing stock 95,000.
Prepare income statement for the year ended 31/3/2021and balance sheet as on the as per
law.
OR
4. a) State and explain Advantages and limitations of Financial statement. 5
b) Prepare an Accounting Equation on the basis of the following transactions: 5
Mohan commenced business with cash 50,000
Purchased goods for cash 30,000
Purchased goods on credit 20,000
Sold goods (costing ₹ 10,000) for 12,000
Bought furniture on credit 2,000
Paid cash to a creditor 15,000
Salary paid 1,000
c) Sunrise company Ltd. Is a company with an authorized capital of 5,00,000 divided into 5,000 10
equity shares of 100 each, 2,500 shares were called and fully paid, give you the fallowing
ledger balance as on 31/3/2021.
Stock(1/4/2020) 50,000
Sales 4,25,000
purchase 3,00,000
Wages 70,000
Discount allowed 4,200
Discount received 3,150

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 Insurance paid (30/6/2021) 6,720
Salaries 18,500
rent 6,000
General expenses 8,950
P&L account (Cr.) 6,220
Printing and stationary 2,400
Advertisement 3,800
Bonus 10,500
Debtors 38,700
Creditors 35,200
Plant and Machinery 80,500
Furniture 17,100
Cash at bank 1,34,700
Reserve 25,000
Loan from M.D 15,700
Bad debts 3,200
Calls in arrears 5,000

You are required to prepare income statement and Balance sheet for the year ended
31/3/2021.
The Fallowing further information is also given for adjustments:
1. Closing stock as on 31/3/2021 is 91,500
2. Provide 15% depreciation on plant and machinery, 10% on furniture.
3. Outstanding liabilities were wages 5,200, salary 1,200 and rent 600
4. Dividend at 5% on paid up capital is to be provided.
Section - C
5. a) What is Forensic accounting? Explain its importance. 5
b) Discuss the difference between IFRS and GAAP 5
c) State and Explain the content of Audit report. 10
OR
6. a) State and explain different types of Window dressing. 5
b) Explain the purpose of Director report in Management decision. 5
c) Explain the role of Corporate governance in the process of strategic management. 10
Section - D
7. a) State and explain the objectives of budgetary control. 5
b) Draw up a material purchase budget from the following information: 5
Estimated sales of a product are 30,000 units. Two kinds of raw materials A and B are
required for manufacturing the product. Each unit of the product requires 3 units of A and 4
units of B. The estimated opening balance in the beginning of the next year: finished goods
5,000 units; A, 6,000 units; B, 10,000 units. The desirable closing balance at the end of the
next year: finished product, 8,000 units; A, 10,000 units; B 12,000 units.

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 c) S. K. Brothers wish to approach the bankers for temporary overdraft facility for the period 10
from October 2021 to December 2021. During the period of this period of these three
months, the firm will be manufacturing mostly for stock. You are required to prepare a cash
budget for the above period
Month Sales Purchases Wages
August 3,60,000 2,49,000 24,000
September 3,84,000 2,88,000 28,000
October 2,16,000 4,86,000 22,000
November 3,48,000 3,92,000 20,000
December 2,52,000 5,36,000 30,000
i. 50% of credit sales are realized in the month following the sales and remaining 50% in the
second following.
ii. Creditors are paid in the month following the month of purchase
iii. Estimated cash as on 1‐10‐2010 is Rs.50,000.
OR
8. a) What is budgetary control? Explain importance budgetary control? 5
b) A company is expecting to have Rs. 25,000 cash in hand on 1st April 2021 and it requires you 5
to Prepare an estimate of cash position in respect of three months from April to June 2021,
from the
Information given below:

Months Sales Purchase Wages Expenses

FEB 70,000 40,000 8,000 6,000
MAR 80,000 50,000 8,000 7,000
APRIL 92,000 52,000 9,000 7.000
MAY 1,00,000 60,000 10,000 8,000
JUNE 1,20,000 55,000 12,000 9,000

Additional Information :
i. Period of credit allowed by suppliers - two months.
ii. 25 % of sale is for cash and the period of credit allowed to customer for credit sale one
month.
iii. Delay in payment of wages and expenses one month.
iv. Income Tax Rs. 25,000 is to be paid in June 2021
c) A factory is currently working at 50% capacity and produces 10,000 units. Estimate the 10
profits of the company when it works at 60% and 80% capacities.
At 60% capacity, Raw Material Cost increases by 2% and Selling Price falls by 2%. At 80%
capacity, Raw Material Cost increases by 5% and Selling Price falls by 5%. At 50% capacity,
the product costs 180 per unit and is sold at 200 per unit. The unit cost of 180 is made up as
follows:
Per unit
Material 100
Labour 30
Factory overhead (40% fixed) 30
Administration over head 20
(50%fixed)

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 Section – E Case Study (Compulsory Question)
9. Prepare a Cash Budget for three months, commencing from 1 June, when the Cash Balance 20
was 1,56,400.
Months Sales Purchases Wages Factory Selling
expenses expenses
April 80,000 41,000 5,600 3,900 10,000
May 76,000 40,000 5,400 4,200 14,000
June 78,000 38,000 5,400 5,100 15,000
July 90,000 37,000 4,800 5,100 17,000
August 95,000 35,000 4,700 6,000 13,000
Additional information:
i. 20% of sales is on cash basis.
ii. Customers are allowed a credit period of two months.
iii. Suppliers allow a credit period of one month.
iv. Lag in payment of wages is one month.
v. Lag in payment of Factory Expenses is half a month.
vi. Lag in payment of Selling Expenses quarter of a month

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