MANAGEMENT ACCOUNTING QUESTIONS -
1. What do you understand by Management Accounting? What are its objectives and limitations?
2. Explain the methods of financial statement analysis.
3. What is variance? Indicate its significance to the Management.
4. Prepare a cash flow statement from the following data:
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|
31.12.2001
|
31.12.2002
|
|
|
Rs.
|
Rs.
|
|
Cash
|
2,000
|
2,500
|
|
Bills receivable
|
2,400
|
2,700
|
|
Inventories
|
3,100
|
3,200
|
|
Other current assets
|
800
|
700
|
|
Fixed assets
|
5,000
|
5,800
|
|
Accumulated depreciation
|
2,100
|
2,500
|
|
Bills payable
|
2,000
|
2,100
|
|
Long-term debt
|
1,400
|
1,300
|
|
Equity share capital
|
5,000
|
5,300
|
|
Profit and Loss a/c
|
2,800
|
3,700
|
Notes:
(a) Fixed assets costing Rs. 1,200 were purchased for cash.
(b) Fixed assets (original cost Rs. 400, accumulated depreciation Rs. 150) were sold for Rs. 200.
(c) Depreciation for the year 2002 amounted to Rs. 550.
(d) Dividend paid amounted to Rs. 300 in 2002.
(e) Reported income for 2002 was Rs. 1,200.
Q5. Following is the Balance Sheet as on 31st December 2005:
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Liabilities
|
Rs.
|
Assets
|
Rs.
|
|
Equity share capital
|
2,00,000
|
Machinery
|
2,00,000
|
|
10% preference share capital
|
1,00,000
|
Land and Building
|
2,00,000
|
|
20% Debentures
|
1,00,000
|
Stock
|
1,50,000
|
|
Profit and Loss a/c
|
1,00,000
|
Sundry debtors
|
50,000
|
|
Bank loan (long-term)
|
50,000
|
Cash
|
1,00,000
|
|
Sundry creditors
|
1,00,000
|
|
|
|
Bills payable
|
50,000
|
|
|
|
|
7,00,000
|
|
7,00,000
|
Required - Calculate:
(a) Current Ratio.
(b) Proprietary Ratio.
(c) Debt-Equity Ratio.
(d) Fixed Assets Ratio.
Q6. From the following information calculate:
(a) P/V ratio.
(b) Break-even point.
(c) Margin of safety.
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|
Rs.
|
|
Total sales
|
3,60,000
|
|
Selling price per unit
|
100
|
|
Variable cost per unit
|
50
|
|
Fixed cost
|
1,00,000
|
(d) If the selling price is reduced to Rs. 90, by how much is the margin of safety reduced?
Q7. The standard mix of a product X is shown below:
Raw material A : 30 units @ Rs. 2 each.
Raw material B : 70 units @ Rs. 3 each.
Standard loss is 10% of input.
Actual mix:
Raw material A : 34 units @ Rs. 2 each.
Raw material B : 66 units @ Rs. 3 each.
Actual loss is 15% of input.
Required - Calculate:
(a) Material cost variance.
(b) Material price variance.
(c) Material usage variance.
(d) Material mix variance.
(e) Material yield variance.
Q8. From the following Balance Sheet of Rolson Ltd, prepare a fund flow statement:
|
Liabilities
|
31.3.2005
|
31.3.2006
|
Assets
|
31.3.2005
|
31.3.2006
|
|
|
Rs.
|
Rs.
|
|
Rs.
|
Rs.
|
|
Equity share capital
|
30,000
|
37,500
|
Cash
|
3,750
|
5,250
|
|
Redeemable preference share capital
|
15,000
|
12,000
|
Stock
|
11,250
|
12,000
|
|
General reserve
|
4,500
|
5,250
|
Bills receivable
|
5,250
|
750
|
|
Profit & Loss a/c
|
3,750
|
5,250
|
Land and Building
|
22,500
|
33,000
|
|
Sundry creditors
|
9,000
|
12,000
|
Goodwill
|
9,000
|
7,500
|
|
Expenses outstanding
|
3,000
|
1,500
|
Debtors
|
13,500
|
15,000
|
|
|
65,250
|
73,500
|
|
65,250
|
73,500
|
Additional Information:
(a) Depreciation of Rs. 1,500 is charged on land and buildings.
(b) Building amounting to Rs. 3,000 was sold for Rs. 2,820.
Q9. From the following information prepare a Balance Sheet:
Gross profit - Rs. 80,000
Gross profit to cost of goods sold - 1/3
Stock turnover - 6 times
Opening stock - Rs. 36,000
Debtors velocity (Year 360 days) - 72 days
Current assets - Rs. 1,50,000
Creditors velocity - 90 days
Bills receivable - Rs. 20,000
Bills payable - Rs. 5,000
Fixed assets turnover ratio - 8 times
Notes: Turnover refers to cost of sales.
Q10. The following data are available in respect of product './c produced by Venkat Ltd. Sales Rs. 70,000; Direct material Rs. 30,000; Direct labour Rs. 15,000; Variable overheads Rs, 7,000; Fixed overheads Rs. 10,000. The company now proposes to introduce a new product 'L' so that sales may be increased by Rs. 30,000. There will be no increase in fixed costs. The estimated variable cost of product 'L' are:
Materials Rs. 15,000; Labour Rs. 7,000; Overhead Rs. 5,500. Advice whether the product L will be profitable or not with detailed workings.