Management Acct 2006 paper - Executive management course

7/28/2019 Management Acct 2006 paper - Executive management course

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Indian Institute of Management-KOZHIKODEManagement Accounting 1-131End Term ExaminationeMEP 061. Answer all questions2.AIf questions carry equal marks3. Maximum marks 40

Duration: 2.5 hours ,.1. The trial bslance of Vivek Autocare Ltd. Is as follows:

Vivek Autocare Ltc):Trial Balance as on Novem~r 30, 19X4Debit

2S:OOOCreditAccount

kepair EquipmentAccumulated depreciation(on repairequipment)SuppliesCashPrepaid RentCreditorsUnearned RevenueShare Capital

. Retained EamingsDividendsService Revenue EamedSalaries Expense 8,320.f.~I~~t~~e 3,800T()f.al _ 51,120S1,13!

tf 1n.,,!>RM'(a) Estimated depreciation on repair equipment. ~s.2,OOO-L; k.c.. DLf' C~./(b) Inventoryof supplies,Rs 1,780 - -r-.~ f>\'~ (It~ b ,/. . ~~~ Ie.!, CT.,/(c) UnexpiredInsurance, Rs. 1,200.(d) Service rendered to clients that had been paid 1'orin advance .andwas yetta betreated as revenue Rs. 410 _ ~~"'N\~ ~~" ..6,(,...Ac..-rv. \.\'I"~"'\,,)~ Rt..'\1t)..,- /rO'fC'I,\~ (e) Reve:nueea~ed b~t r~otyet billed, Rs 23~ .~ -(f) Unpaid salanes, Rs. 720 S~'


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2. Aftercompletingadegreeinfashiontechonology,ChandrikasetupFolkweartoselldesigner \'+~ .dresses.SheinvestedRs.20,000inCa::;h.SheusedRs. 6~OOOobuystoreequipment. Pv~The store openedfor business on July 1. During the month, she paid out Rs. 62,700 for --'I"~merchandise and Rs. 3~ towartls oDerating e~ns~. Also! she~th~~.Rs. 11~o.ooorperso~al purposes. At the month-elld, she prepared the following balance sheet:T ;> "" \f ~ ~0'Folkwear:BalanceSheetason July 31, 19XXCreditors(for merchandise) ~ '19'600 CashChandrika,Capital 43,800 Debtors(ior sales) -. . Merchandise Inventory'-A\,t), .~..O~ StoreF.qurpment 6,000Less Depreciation 100

Page ~

63,400

~16,80023,200 ~ W ~ , \-u...t17,500-1 ~) ,rw_. I5,90063,400

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..

Calculate for July the net profit . Cost of gopds sold, sales and collection from customersAlso prepare a profit and loss account for Folkwear for July 19>0fl1ber31,19X4)

Net SalesCost of Goods SoldGross ProfitSelling and administrative ExpensesProfitbefore Interest and TaxInterest ExpenseProfit before TaxIncome TaxProfit after.Tax

???13,000~13,500~

??Surat Company: Balance Sheet as on August 3~, 19X4

Share Holders' FundsShare CapitalReserves and Surplus

95,000??UabllitiesSecured LoansUnsecured LoansCurrent Liabilities

30,000????AssetsFixed Assets

InvestmentsInventoriesDebtorsCash

1,30,000???10,0004,OO,OiiO

contd. onpage3

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Page 3Additional Information(a) Asset turnover is 2.3 times(b) Total l iabil it ies to equity ratic is 1.5(c) Current ratio is 1.8(d) Average debt collection perios is 36.5 days (assume a 365 ~.day)'ear)(e) Gross prflt ratio is 15% '(f) Interest expense is.comprised of.interest on secured loans a~10% p.a and on unsecur6dloans at 15% p.a

(9' Income tax is 50% of acwunting profit before tax

~-Complete the financial statenients ofSurat Compan~' for 19X4. Showsupporting cal..-:ulations.Assume that the year-end-3ccount balances are representative forthe.whoie year '.

4. The following information was available from the records of Joseph Company:

Beginning InventoryPurchasesPurchase Returns ar.d AllowancosSalesSales Returns and Allowances

At Cost At Retail7,000 9,00034,000 53,0001:000 2,00047,0005,000

Estima:e the company's ending inventory at cost using the retail inventory method.Suppose that the physical year-er.d inventory at retail was Rs. 16,200. What is the cost of inventorylost through shoplifting and ot!'er ~uses? .

5. Vinay Electronics Company's Profit and loss account for the year ended July 31,19X7 and its balanceshee~ as at July, 19X6 and 19X7, are as follows:

Vina) ;:lectronics Company: Prorltand loss Acount(For the year ended 31.07.19X7)

SalesGain on Sale of InvestmentsDividend incomeinterest IncomeInsurance Proceeds and Earthquake Loss Claim

4,39,00019,00012,00014,00011,000

5,01,0003,84,000 .75,000.64,00026,000(48000)o(48000)

contd. on page 4

Cost of Goods SoldSelling and Administrative ExpensesInterest ExpenseLoss on Sale of PatentProfit before TaxIncome TaxProfit After Tax


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Additionalinformation: rI~) Purchased machinery costing Rs. 1,39,000 with cash. 1-(b) Purchased machinery for Rs.63,000 on long term, unsecured credit"-(c) Repaid unsecured loans of Rs.14,000 f(d) Sold all the patents for Rs.3000"f(e) Sold investments costing Rs. 49,000 for Rs. 68,000:((f) Issued secured debentures of Rs. 1,50,000 r '(g) Redeemed secured debetures of Rs. 24,000 f(h) Issued unsecured loans of Rs. 1,10,000 ,. f(i)PurchasedinvestmentsforRs. 13,000 Issuedat parequityshares forRs.20,000JWrote off Rs. 16,000 of debtors and provided Rs. 22,000 for doubtfuldebts, included in selling&administrativeexpenses~Cost ofGoods Sold includes depreciation ofRs.21,000(m) Received insurance prOceeds of Rs. H,OOO'fromearth quake loss claimExplainwhythere was an increase incash inspite of Vinay ElectronicsCompanyincurring a net loss of Rs.48,OOO.

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Management Acct 2006 paper - Executive management course