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MS-04-Accounting and finance for managers

MS-04-Accounting and finance for managers

 

1.         The Balance Sheet of Bharat Machinery Ltd., as on December 31, 2009 and 2010 are as follows: 

Items

Dec. 31, 2009

Rs.

Dec. 31, 2010

Rs.

Assets

 

 

Plant and Machinery  

5,00,000

8,00,000

Land and Buildings

   80,000

1,20,000

Stock

1,00,000

   75,000

Sundry Debtors

1,50,000

1,60,000

Cash

   20,000

   20,000

 

8,50,000

11,75,000

Liabilities and Capital

 

 

Share Capital

5,00,000

7,00,000

Profit and Loss A/c

1,00,000

1,60,000

General Reserve

   50,000

70,000

Sundry Creditors

1,53,000

1,90,000

Bills Payable

   40,000

50,000

Outstanding Expenses

   7,000

5,000

 

8,50,000

11,75,000

Additional Information

(i)                 Depreciation of Rs. 50,000 has been charged on Plant and Machinery during the year 2010.

(ii)               A piece of machinery was sold for Rs. 8,000 during the year 2010. It had cost Rs. 12,000, depreciation of Rs. 7,000 had been provided on it.

Prepare a schedule of change in working capital and a statement showing the sources and application of funds for the year 2010.

2.   From the following cost, production and sales data of Decors Motor Ltd., prepare comparative income statement for three years under (i) absorption costing method, and (ii) marginal costing method. Indicate the unit cost for each year under each method. Also evaluate the closing stock. The company produces a single article for sale.

Particulars

Year

 

2008

2009

2010

Selling Price per unit

  20

  20

  20

Variable manufacturing cost per unit

  10

 10

  10

Total fixed manufacturing cost

5000

5000

5000

Opening Stock (Units)

-

-

 500

Units Produced

1000

1500

2000

Units Sold

1000

1000

1500

Closing Stock (Units)

-

  500

1000

 

3.         From the following information related to XYZ Ltd.; you are required to find out (a) contribution (b) Break-even point in units (c) Margin of safety, (d) Profit

            Total Fixed Costs                    Rs.         6,000

            Total Variable Costs               Rs.       20,000

            Total Sales                               Rs.       32,000

            Units Sold                                             4,000 Units

Also calculate the volume of sales to earn profit of Rs. 12,000.

4.         Write short notes on the following:

            a) Performance budgeting

            b) Zero base budgeting

            c) Factors affecting dividend decisions

            d) Accrual concept

5.         What is capital structure? Explain the features and determinants of an appropriate capital structure. 

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