HOLIDAY HOMEWORK-09-10

CLASS; XIIACCOUNTANCY

Assignment Based on Projects.

Specific Problems on Ratio analysis and comparison of financial statements.

  1. Bimal Ltd. Company has given the following information.

Particulars. / March 2002 / March 2003
Current Assets / 6,00,000 / 9,00,000
Current Liabilities / 3,00,000 / 5,00,000
Gross Profit / 4,50,000 / 7,20,000
Net Sales / 18,00,000 / 36,00,000

The Management of the company is of the opinion that their workers are working everyday efficiently, since sales and gross profit have increased and current assets have increased by RS. 3,00,000 where as current liabilities have increased only by Rs.2., 00,000 and thus their short-term financial position is also becoming better. The management is thinking of increasing the compensation to the manager and employees.

Do you agree with the viewpoint of the managers?

Prove your answer.

  1. The following information is given. You are required to find out Fixed Assets turn over and comment on it.

Particulars

/ 2003 / 2003
Net fixed Assets / 3,00,000 / 6,00,000
Net Sales / 12,00,000 / 16,00,000
  1. The income statement of ABC LTD for the year ending 31st March 2002 and 31st march 2003 are given below. RS. In ‘000

Particulars

/ March
2002 / March
@2003
Net Sales / 1,785 / 1,900
Cost of goods sold / 1,450 / 1,500
Operating expenses
Selling and distribution expenses
Administrative expenses / 80
70 / 90
72
Non operating expenses
Interest paid
Income tax paid / 35 / 40

Re-arrange the data in a comparative form and comment on the profitability position of the company.

  1. The balance sheet of Bali Ltd. and Sugreev ltd. are given below:

Balance sheet as on 31st march 2003

Particulars

/ Bali Ltd. / Sugreev Ltd.
Assets
Land and building / 1,60,000 / 2,46,000
Plant and machinery / 6,68,000 / 12,00,000
Short term investments / 2,000 / 80,000
Inventories / 20,000 / 50,000
Sundry debtors / 8,000 / 16,000
Prepaid expenses / 2,000 / 4,000
Cash and Bank balances / 16,000 / 20,000
8,76,000 / 16,16,000
Liabilities.
9% Preference shares / 2,40,000 / 3,20,000
Equity Share capital / 3,00,000 / 8,00,000

Reserves and surplus

/ 28,000 / 36,000
Long term loans / 2,30,000 / 2,60,000
Bills Payable / 4,000 / -
Sundry Creditors / 24,000 / 8,000
Outstanding expenses / 30,000 / 12,000
Proposed dividend / 20,000 / 1,80,000
8,76,000 / 16,16,000

Compare the financial position of the two companies by drawing common size balance sheet. Time allowed 30 minutes.

  1. You are a bank manager assigned the task of granting loan to business entities. The following data in respect of two companies, which company would you give priority assuming that you can grant loan to one company only.

Particulars / A ltd. / B Ltd.
Current Ratio / 3 : 1 / 2 : 1
Acid Test Ratio / 2 : 1 / 1.5 : 1
Debt Equity ratio / 40% / 50%
Interest Coverage ratio / 5 times / 4 times

If you have sufficient fund to grant loan, would you grant loan to both the companies? Give reasons.

  1. Prepare a comprehensive problem. Read and follow the guidelines given to you on project.
  1. Prepare two specific problems on Ratio Analysis. Read and follow the guidelines given to you on project.

GUIDELINES FOR PROJECT WORK IN ACCOUNTANCY.

UNIT-WISE WEIGHTAGE OF MARKS

CLASS XII, PROJECT WORK.20 MARKS

Unit 1 Project file 4 Marks
Unit-2 Written Test 12 Marks- 1 hour
Unit-3 Viva voce 4 Marks

UNIT-1 PROJECT FILE: (MARKS.4)

OBJECTIVES.

-To enable a student to complete the accounting process in real business situations.

-To develop the competence of reading accounting data of business firms and interpret the information on the basis of given guidelines to present the desirable information in required format in project file.

The students will prepare a project file to record their work related to the problems attempted by them.

-First Page of the file should describe the identity of the student, school and the teacher concerned.

-Index to indicate columns for title of work, page no., date, teacher’s remarks and signature.

-The format of project work will be: -

  • Problem details. (Facts of the problem)
  • Required information.
  • Steps to solve the problem.
  • Solution and presentation of information.
  • Analysis and interpretation of information.

Project file should be neatly handwritten and presented with page number marked. Each step of the solution needs to be high lighted. Conclusions drawn are placed in boxes.

The project file should contain three types of problems.

i. Comprehensive problem:

The comprehensive problem will involve the students from initial stage of accounting to the preparation of financial statement and analysis of financial statements.

The data provided will represent real life situation in a condensed form. The students must derive meaningful information for taking decisions for the purpose of investment, expansion, financing etc.

ii. Specific Problems No.1:

This will be a problem relating to Accounting Ratios. The data for this will be drawn from Corporate Sector. The situations given in problems will require a student to analyze information given in the financial statements.

For the purpose, the following ratios will be included besides those given in the syllabus:

  1. Capital employed turn over ratio.
  2. Fixed Assets turn over ratio.
  3. Total assets turn over ratio.
  4. Net profit ratio.
  5. Return on capital employed ratio. (R.O.I)
  6. Return on equity ratio.
  7. Return on Total assets ratio.
  8. Earning per share ratio. (E.P.S)

iii. Specific Problem No.2:

This will be a problem relating to Cash Flow Statement. The data for this also will be drawn from corporate world.

UNIT-2 WRITTEN TEST. (MARKS.12)

Questions will be asked from ratio analysis, Cash flow statement. The questions will be application oriented.

UNIT-3 VIVA VOCE.

The external examiner will ask questions to know,

  1. Whether the student has understood the topic covered and is able to express.
  2. Whether the project file presented by the student is a work done by him/her.

Guide lines for Comprehensive project.

Steps.

  1. Prepare a real life situation from starting a business unit with capital till the preparation of financial statement for an accounting period. The details of the business will be described like a story.
  2. Journalise the transactions mentioned in the first step. (Prepare subsidiary books)
  3. Post them into ledger.
  4. Draw out trial balances.
  5. Prepare income statement.
  6. Prepare position statement.
  7. Analyse
  8. Interpret the information from the financial statements.

Guide lines for specific project.

  1. Financial Statements of companies are available on the net, in Newspapers and in corporate magazines. Select two companies of your choice for your two specific projects.
  2. Calculate the ratios mentioned in the guidelines using data of one company.
  3. Analyse and interpret the result.
  4. Draw conclusion.
  5. Take out Two years Balance sheet of the other company for the specific project based on Cash Flow.
  6. Analyse the Cash inflow and out flow of the three main activities of that company .
  7. Draw conclusion.

HOLIDAY HOMEWORK

CLASS; XIIBUSINESS STUDIES

1. “ Management is the trinity of art, science and profession.” In the light of this statement explain the nature management. 6.

2. Your grand father has retired as the director of a manufacturing company. At what level of management was he working? What functions do you think he was performing at that level? 3.

3.” Coordination is the essence of management.” Explain this statement.3.

4. Explain the consequences of not following the following principles of management.

  1. Unity of command.
  2. Unity of direction.
  3. Principle of equity.
  4. Scalar chain.

5. Do you agree with the view that Taylor’s principle of scientific management and Fayol’s principle of management are mutually complimentary? Give reasons in support of your answer.

6. If an organization does not provide the right place for physical and human resources in the organization, which principle is violated? What are the adverse effects of not following it?

7. “ The external environment of a business is dynamic.” Explain this statement with the help of at least two examples.

8. “Liberalization and globalization have created both challenges and opportunities for the Indian business.” Discuss this statement.

10 Why does planning sometimes fail inspite of the best effort of the management?

11 In an electrical goods manufacturing company, there are four main activities, marketing, production, Finance and personnel. The general manager is planning to structure the organization. Which type of organisatin structure should he adopt and why? Give two reasons.

12. XYZ limited is manufacturing chemicals and textiles. What type of organization structure would suit the requirement of such an organization and why?

HOLIDAY HOMEWORK-09-10

CLASS; XIBUSINESS STUDIES

  1. Mr. Santosh Wilson was a son of an entrepreneur and has passed his higher secondary examination in science with 90 percent marks. He wants to leave college education and become an engineer whereas his father wants him to join his business.

Should Mr. Santosh go for some profession (considering his marks in the examination), which would, you suggest?

What advise would you give Mr.Santosh about choosing an appropriate occupation?

  1. Collect the details of any two companies which are merged in the recent past. You can collect the details from the net or from Economic Journals.
  1. Rajnikant Trivedi and his partners enter a business. In a couple of years they want to enter a business. In a couple of years they want to enter into a number of activities like mining, construction, free hospital services, retail, farming, wholesale, manufacturing, banking, water supply, school for poor children, fishing, energy supply, insurance, communication, forestry, tourism, club for socializing etc.

Which of the above activities are economic activities and non-economic activities? And why?

  1. Identify a company that fulfills their Social responsibilities. Make a project analyzing their social welfare activities.
  1. A new business complex is coming up close to your friend’s residence. This will be a multiplex including a movie hall, shopping arcade, restaurants, fast food joints etc. All this will become operational in an n years time.

In the mean time, to gather the support and co-operation of the residential colonies nearby, you have planned a meeting with the residents. You have just finished your chapter on the social responsibilities of business and have been invited to go for the meeting.

What suggestions will you give to them?

6.What do you understand by Sensex?

Select any five leading companies which are in the news lately

-Collect and stick newspaper cuttings aboutthe news they are making,their strategies, the people behind the success etc…..--

-Stock quotations of five days (Times of India Page Times Business-NSE S& P CNX 500)

- ACCOUNTANCY

1. The proprietor is regarded as the creditor of the business to the extend of capital invested by him in the business. Name and explain the assumption.

2. When stock is valued at cost in one accounting period and at lower of net realizable value in another accounting period, two accounting principles are conflicting with each other. Name these principles and explain.

3. Name the following principles or assumptions.

  1. The assumption, which states that a business enterprises will not be sold or liquidated in the future.
  2. Recognition of expenses in the same period as associated revenues.
  3. Classification of assets as current and fixed assets.

iv.Appending notes to the financial statements

4.Calculate Total equity if

i.Owners equity n the beginning Rs.60,000

ii.Equity of creditorsRS.50,000

  1. Revenue during the period RS.70,000
  2. Expenses during the period RS.65,000

Also calculate owner’s equity at the end.

5. Prepare accounting equation from the following transactions.

  1. Started business with cash Rs.1,75,000 and goods Rs.25,000
  2. Bought goods for cash Rs.50,000 and on credit RS.40,000
  3. Goods costing Rs.30,000 sold at a profit of 25% out of which Rs.20,000 received in cash.
  4. Good costing Rs.3,000 is taken for personal use.
  5. Interest on capital Rs.500 and interest on drawing Rs.30
  6. Salary paid Rs.4,000 and salary outstanding Rs.450.

6.An employee is dismissed from his job. Does this event represent a business transaction? Support you answer with the explanation of the appropriate assumption.

8 Write two differences between tangible assets and intangible assets.

9. ‘A distinction should be made between the business transaction and the personal transactions of the proprietor.’ Explain the assumption behind this statement.

10. i.Yogesh commenced business on 1st January 1998 with a capital of Rs.5,00,000 and a loan of Rs.1,00,000 borrowed from City Bank. On 31st December 1998 , his assets were Rs.8,00,000. Calculate his closing capital and profits earned during the year.

ii.If in the above case, the proprietor had introduced fresh capital of Rs.40,000 and had withdrawn Rs.10,000 for personal purposes, calculate his profits.