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KARAIKUDI INSTITUTE OF MANAGEMENT

KIT & KIM TECHNICAL CAMPUSKeeranipatti, Thalakkavur, Karaikudi 630 307

MBA 2013-14 :: I SEMESTER

MODEL EXAMINATION

BA 7106 - ACCOUNTING FOR MANAGEMENT

Time: 3 Hrs Maximum Marks : 100Answer ALL questions

PARTA ( 10 x 2 = 20 Marks )1. What is GAAP?2. What are human resources accounting?3. What are statutory books?4. What is meant by Employees Stock option scheme?5. What are the limitations of Ratio scheme?6. What is fund from operation?7. What is breakeven point?8. What is budgetary control?9. What is codification?10.Name any two accounting software.

PART B (5 x 16 = 80 Marks)11.a) Explain the various accounting concepts and conventions.

Orb) Discuss the advantages and disadvantages of inflation accounting.

12.a) Murugan Ltd. was formed on 1-7-96 to acquire the business of Johnson & Sons with effect from1-1-96. When the companys first accounts were prepared on 31-12-96, the following were noted:

a) Sales for the year Rs.3,00,000b) Sales in January, February, April and May were only 50% of the annual average.

Sales of August, September and December were twice the annual average.

Calculate the Sales ratio.

Or

b) The following is the Trial Balance of Shree Ganesh on 30thJune 2007.

Name of Account Debit Credit

Capital 1, 86,000Drawings 15,735Stock(1.7.2006) 17,280Sundry Creditors 18,900Sundry Debtors 43,500

Machinery 60,000Patents 22,500Freehold Land 30,000Buildings 96,000sales 2,96,340

Purchases 1,22,025

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Sales Returns 2,040

Purchases Returns 1,500Cash at Bank 7,890

Cash in hand 1,620Insurance 1,800General Expenses 9,000Salaries 45,000Wages 25,440Factory fuel and power 14,190Carriage on Purchases 6,120Carriage on Sales 9,600Rent 27,000

5, 29,740 5, 29,740The following adjustments are to be effected;

Stock on 30thJune 2007 Rs.20,400 5% on Sundry Debtors is to be written off as bad. Salaries for the month of June 2007 amounting to Rs.4, 500 were unpaid. Rent Rs. 3000 is accrued but not received. Depreciate Machinery @ 10% and Patents @ 20%.

You are required to prepare Trading and Profit and Loss Account and the Balance Sheet as on

30thJune 2007.

a) The following are the Financial Statements of Sun Ltd. For the year 2012-1313. Balance Sheet

( as on 31-03-2013)

Liabilities Rs. Assets Rs.

1,00,000 equity shares

of Rs. 10 each10,00,000 Fixed Assets 12,50,000

General Reserve 9,00,000 Stocks 3,50,000Profit and Loss A/C 25,000 Sundry Debtors 1,80,000

6% Debentures 2,00,000 Cash 5,15,000

Sundry Creditors 1,20,000

Proposed

Dividends50,000

22,95,000 22,95,000

Profit and Loss Accounts(for the year ended 31-03-2013)

Sales

Less : Cost of Goods Sold

24,00,000

16,00,000

Gross Profit 8,00,000

Expenses 7,00,000

Net Profit 1,00,000

You are required to compute the following ratio:

Current Ratio Acid Test Ratio Gross Profit Ratio Net Income to Capital Debt to Equity Ratio Fixed Asset to Turnover Ratio.

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******* ALL THE BEST *******

Or

b) Given below are the balance sheets of RK Ltd., as on 31-03-2012 and 31-03-2013Liabilities 2012 (Rs.) 2013 (Rs)

Equity Share Capital 2,00,000 3,00,000

Long-Term Loan 1,00,000 1,00,000

Creditors 1,50,000 2,00,000Bills Payable 2,00,000 3,00,000

Retained Earnings 1,80,000 2,00,000

8,30,000 11,00,000

Assets 2012 (Rs) 2013 (Rs)

Cash 60,000 30,000

Stock 1,20,000 1,90,000

Debtors 80,000 1,20,000

Goodwill 2,00,000 1,50,000

Plant and Machinery 1,00,000 2,00,000

Land and Building 2,00,000 4,00,000

Furniture 70,000 10,000

8,30,000 11,00,000

Prepare

Schedule of changes in Working Capital Fund flow statement.

14.a) Discuss the various classifications of manufacturing costs.Or

Year Sales Profit

2011 1,00,000 20,000

2012 1,20,000 25,000

Find out

P/V Ratio Fixed cost Breakeven Point Sales, to earn a profit of Rs.30,000

15.a) Explain the significance of computerised accounting system.Or

b) Discuss the utility of Pre-packaged accounting software in business.