MB0041- FINANCIAL AND MANAGEMENT ACCOUNTING

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ASSIGNMENT

DRIVE	FALL 2015
PROGRAM	MBADS / MBAHCSN3 / MBAN2 / PGDBAN2 / MBAFLEX
SEMESTER	I
SUBJECT CODE & NAME	MB0041- FINANCIAL AND MANAGEMENT ACCOUNTING
BK ID	B1624
CREDITS	4
MARKS	60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Q1. Analyze the following transaction under traditional approach.

18.1.2011 Received a cheque from a customer, Sanjay at 5 p.m. Rs.20,000

19.1.2011 Paid Ramu by cheque Rs.1,50,000

20.1.2011 Paid salary Rs. 30,000

20.1.2011 Paid rent by cheque Rs. 8,000

21.1.2011 Goods withdrawn for personal use Rs. 5,000

25.1.2011 Paid an advance to suppliers of goods Rs. 1,00,000

26.1.2011 Received an advance from customers Rs. 3,00,000

31.1.2011 Paid interest on loan Rs. 5,000

31.1.2011 Paid instalment of loan Rs. 25,000

31.1.2011 Interest allowed by bank Rs. 8,000

Analysis of transaction –with accounts involved-nature of account-affects and debit/credit

Answer :

Date	Accounts	Nature of	Affects	Debit/
	Involved	Account		Credit
18.1.2011	Cash A/.c	Real	Cash is coming in	Debit
	Sanjay A/c.	Personal	Sanjay is the giver	Credit
19.1.2011	Ramu Ac.	Personal	Ramu is the receiver	Debit
	Cash A/.c	Real	Cash is going out	Credit

Q2. The trial balance of Nilgiris Co Ltd., as taken on 31st December, 2002 did not tally and the  difference was carried to suspense account. The following errors were detected  subsequently.

a) Sales book total for November was under cast by Rs. 1200.

b) Purchase of new equipment costing Rs. 9475 has been posted to Purchases a/c.

c) Discount received Rs.1250 and discount allowed Rs. 850 in September 2002 have been  posted to wrong sides of discount account.

d) A cheque received from Mr. Longford for Rs. 1500 for goods sold to him on credit earlier,  though entered correctly in the cash book has been posted in his account as Rs. 1050.

e) Stocks worth Rs. 255 taken for use by Mr Dayananda, the Managing Director, have been  entered in sales day book.

f) While carrying forward, the total in Returns Inwards Book has been taken as Rs. 674  instead of Rs. 647.

g) An amount paid to cashier, Mr. Ramachandra, Rs. 775 as salary for the month of November  has been debited to his personal account as Rs. 757.

(Pass journal entries and draw up the suspense account, Journal entries of all the transactions, Suspense account with Conclusion)

Answer :

Serial No.	Journal Entry	Debit	Credit
a)	Suspense Account	1200
	To Sales		1200
b)	No Suspense Account Involved

3 From the given trial balance draft an Adjusted Trial Balance.

Adjustments:

1. Charge depreciation at 10% on Buildings and Furniture and fittings.

2. Write off further bad debts 1000

3. Taxes and Insurance prepaid 2000

4. Outstanding salaries 5000

5. Commission received in advance1000

 Solution;-Ledger accounts Furniture and fittings a/c

Particulars	Rs.	Particulars	Rs.
To bal b/d	500000	By Depreciation By bal c/d	50000 450000
Total	500000	Total	500000

4 Compute trend ratios and comment on the financial performance of Infosys Technologies Ltd. from the following extract of its income statements of five years. (inRs. Crore)

Preparation of trend analysis

Solution: Infosys Technologies Ltd.

Trend Analysis Particulars	2010-11	2009-10	2008-09	2007-08	2006-07
Revenue	27,501	22,742	21,693	16,692	13,893
Operating Profit (PBIDT)	8,968	7,861	7,195	5,238	4,391

5 Give the meaning of cash flow analysis and put down the objectives of cash flow analysis. Explain the preparation of cash flow statement.

Answer : Meaning of cash flow analysis

A cash flow statement is one of the most important financial statements for a project or business. The statement can be as simple as a one page analysis or may involve several schedules that feed information into a central statement.

A cash flow statement is a listing of the flows of cash into and out of the business or project. Think of it as your checking account at the bank. Deposits are the cash inflow and withdrawals (checks) are the cash outflows. The balance in your checking account is your net cash flow at a specific point in time.

6 Write the assumptions of marginal costing. Differentiate between absorption costing and marginal costing.

Answer : The Cost of a product of comprises of materials, labour, and over heads. On the basis of variability they can be broadly classified as fixed and variable costs. Fixed costs are those costs which remain constant at all levels of production within a given period of time. In other words, a cost that does not change in total but become. progressively smaller per unit when the volume of production increases is known as fixed cost. it is also called period cost eg. Rent, Salary, Insurance charges etc. On the other hand variable cost are those cost which very in accordance with the volume of output. To part it in another way. variable costs are uniform per unit. but their total fluctuates in direct position to the total of the related activity or volume

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