MCA II (Second) Semester Examination 2012-13
Course Code:MCA202 Paper ID: 0872402
Accounting and Financial Management
Time: 3 Hours Max. Marks: 70 Max Marks: 75
Note: Attempt six questions in all. Q. No. 1 is compulsory.
1. Answer any five of the following (limit your answer to 50 words). (4x5=20)
a) What are different types of accounts?
b) Define the concept of materiality and disclosure.
c) How book keeping differ from accounting?
d) Who can be financial manager?
e) Define the concept of debit and credit notes.
f) Given the following information you are required to compute capital structure and capitalization:
Liabilities / `Equity share capital / 10,00,000
Preference share capital / 5,00,000
Long term loans and debenture / 2,00,000
Retained Earnings / 6,00,000
Capital surplus / 50,000
Current Liabilities / 1.50,000
Total / 25,00,000
g) How cash book differ from cash flow statement?
h) Define composite leverage.
2. Discuss in detail meaning and principles of accounting. Who are users of accounting information? (10)
3. From the following balances of Mr. Sunil, prepare the P&L. account for the year ended on 31-3-2004 and balance sheet for the same date, after making necessary adjustments:
Particulars / Amount (`) / Particulars / Amount (`)Capital of MR. Sunil / 2,28,800 / Stock (1-4-03) / 38,500
Drawing of MR. Sunil / 13,200 / Wages / 35,200
Plant and Machinery / 99,000 / Sundry creditors / 44,000
Freehold Property / 66,000 / Postage and telegrams / 1,540
Purchases / 1,10,000 / Insurance / 1,760
Return outward / 1,100 / Gas and fuel / 2,970
Salaries / 13,200 / Bad debts / 660
Office Expenses / 2,750 / Office rent / 2,860
Office Furniture / 5,500 / Freight / 9,900
Discounts (Dr.) / 1,320 / Loose tools / 2,200
Sundry debtors / 29,260 / Factory lightening / 1,100
Loan to Mr.Mukesh @10% p.a. as on 1-4-03 / 44,000 / Provision for bad debts / 880
Interest on Ioan to Mr.Mukesh / 1,100
Cask at bank / 29,260 / Cash on hand / 2,640
Bills payable / 5,500 / Sales / 2,31,440
Adjustments:
a) Stock on 31-3-2004 was valued at `72,600.
b) A new machine was installed during the year costing `15,400. But it was not recorded in the books as no payment was made for it. Wages `1100 paid for its erection has been debited to wages account.
c) Depreciate Plant and machinery by 1/3rd, Furniture by 10%, freehold property by 5%.
d) Loose tools were valued at `1,760 on 31-3-2004.
e) Of the sundry debtors `600 are bad and should be written off.
f) Maintain a provision of 5% on sundry debtors and doubtful debts.
g) The manager is entitled to a commission of 10% of the net profit after charging such companies.
(10)
4. Discuss in detail concept, nature and limitation of financial statement. What are latest techniques of financial statement analysis? (10)
5. Discuss in detail meaning, scope and objectives of financial management. (10)
6. What do you mean by capital structure? What are the major determinants of capital structure? (10)
7. ABC Company has currently an all equity capital structure consisting of 15,000 equity shares of `100 each. The management is planning to raise another `25 lakhs to finance a major programme of expansion and is considering three alternative methods of financing:
a) To issue 25,000 equity shares of `100 each
b) To issue 25,000, 8% debentures of `100 each
c) To issue 25,000, 8% Preference Shares of `100 each
The company’s expected earnings before interest and taxes will be `8 lakhs. Assuming a corporate tax rate of 50 per cent, determine the earnings per share (EPS) in each alternative and comment which alternative is best and why? (10)
8. a) From the following information relating to Y LTD calculate the cash flow from operating activities: (5)
Particulars / `Operating profits before changes in operating assets / 57,500
Debtors (decrease) / 5000
Stock (increase) / 2000
Bills Payable (decrease) / 4500
Creditors(increase) / 3200
Cash at bank (increase) / 20,000
b) Discuss in detail advantage and limitations of cash flow statement. (5)