FINANCIAL ACCOUNTING & COSTING
Instruction: All questions are compulsory.
Q1. Using the trial balance used below. Prepare the Trading. Profit and Loss account & Balance sheet for X and Y & CO for the month ended 30 March 2016.
|
|
Dr
|
|
Cr
|
|
Purchase s.
|
61,000
|
Capital
|
85,500
|
|
Stock
|
7,000
|
Returns Outwards
|
2,500
|
|
Returns Inward
|
1,500
|
Sales
|
90,000
|
|
Duty on imported goods
|
5,000
|
Commission
|
1,000
|
|
Carriage on sales
|
2,000
|
Bills Payable
|
1,500
|
|
Office Salaries
|
2,500
|
Creditors
|
27,000
|
|
Wages
|
11,000
|
|
|
|
Drawings
|
4,000
|
|
|
|
Rent
|
3,000
|
|
|
|
Telephone Charges
|
5,000
|
|
|
|
Discount
|
1,000
|
|
|
|
an Balance
|
17,000
|
|
|
|
Debtors
|
25,000
|
|
|
|
Machinery
|
50,000
|
|
|
|
Depreciation on Machinery
|
2,500 |
|
|
|
Horses and Carts
|
10,000
|
|
|
|
|
2,07,500
|
|
2,07,500
|
Stock on March 31 2016 was Rs. 10,500 /-
Q2. ADITHYA Infrastructure LTD is considering to develop diversification business. Company expects the cost of this diversification incurs to be Rs.450 Lakhs. The following are the estimated earnings of the diversified business for 5 years.
| Year |
1 |
2 |
3 |
4 |
5 |
| Earnings in Lak Rs. |
110 |
133 |
125 |
120 |
170 |
If the company expected minimum rate of return is 16%? Analyse the project based on
(i) Net Present Value
(ii) Internal Rate of Return ORR)
(iii) Profitability index Present value interest rates for 16% are given below.
| Year |
1 |
2 |
3 |
4 |
5 |
| 16% |
0.862 |
0.743 |
0.641 |
0.552 |
0.476 |
b) Write short note on Depreciation definition and concept
Q3. a) Explain the following capital Investments Any Two
(i) shares (aa) Preference shares (ab) Ordinary
Shares (ac) Redeemable equity shires
(ii) Debentures and bonds
(iii) Mutual funds
b) Explain the components of working capital with detail
Q4. a) Southern Company sells several products. Information of average revenue and costs are as follows:
| Selling price per unit |
Rs. |
1,400.00 |
| Variable costs per unit: |
|
|
| Direct materials |
Rs. |
275 |
| Direct manufacturing labor |
Rs. |
125 |
| Dian ufacturin g ove mead |
Rs |
26.8 |
| Selling costs |
Rs. |
140/- |
| Annual fixed costs |
Rs. |
64,60,000/- |
1. Calculate the contribution margin per unit
2. Calculate the number of units Southern company must sell each year to break even.
3. Calculate the number of units southern company must sell to yield a profit of Rs.100,00,000/-
b) Write shod note on Break even analysis with graphical presentation
Q5. Explain the following balance sheet analysis ratios
a) Liquidity ratios (i) Current ratio (ii) Quick ratio
b) Profitability ratio (i) Profit margin (ii) Return on assets (iii) Return on Equity
c) Leverage ratio (I) Debt-Equity ratio
d) Activity ratio (i) Inventory turnover (ii) fixed asset turnover (iii) Total asset turnover
Q6. Write short notes on
a) Labour turnover
b) Standard Costing
c) Budgeting and its control Objectives
d) Batch costing
e) Economic order quantity