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MCA (Revised)Term-End Examination

December, 2OO7MCS-035 : ACCOUNTINGAND FINANGIAL

MANAGEMENTT'ime : 3 hours MaximumMarks : 700

(Weishtage75o/o)Ne'Y,"i:,^w;l #!;:'7::l'::'";l. (a) Prepare Trading and Profit & Loss Account for the

year ended 31tt March 2006 and Balance Sheet ason that date from the following Trial Balance andother information : 30

ParticularsDr

Amount(Rs.)Cr

Amount(Rs.)Capital[:urniturePurchasesf)ebtors

20,0001,50,0002,00,000

1,00,000

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ParticularsDr

Amount(Rs.)

CrAmount(Rs.)

Interest earned iSalariesSalesPurchase returnWagesRentBad debts written offCreditDrawingsProvision fordebtsPrinting andInsurance

bad

Stationery

Opening StockOffice expensesProvision forDepreciationSales Return

30,000

20,00015,0007,000

24,000

8,000L2,00050,00012,000

10,000

4,000

20 000

6,000

2.000

3,210005,000

1

Additional lnformation ;(i) Depreciate fumiture by \0o/oon original cost.(ii) A provision for doubtful debts is to be created

to the extent of 5o/oon sundry debtors.

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(iii) Salaries for the month of March 2006amounting to Rs. 3,000 were unpaid whichmust be provided for. Salaries includedRs. 2,000 paid in advance.

(iv) lnsurance arnounting to Rs. 2,000 is prepaid.(v) Provide for outstanding office expenses

Rs.8,000.(vi) Stockused or personalpurposeRs. 6,000.(vii) ClosingstockRs. 60,000.

(b) Following is the Balance Sheet of Shyam MillsLimitedas on 31tt March 2006

Liabilities AmountRs.iquity share capitalL2o/oPreference sharecapitalReserve fundI4o/o DebenturesSundry CreditorsBills payableTax provisionOutstanding expenses

Total

5.00.00000.00000,00000,00060,00000,00030,00010.000

147

11

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Assets AmountRs.I r ixed assets18,00,000Less Dep. 5,00,000Investrnent (Short term)StockBook DebtsBank balance

Total

13,00,0001,50,0003,00,0002,00,000

50.00020,00,000

Other informationsupplied s as follows:(1) Net sales 30,00,000(2) Cost of goodssold 25,80,000(3) Net incomebefore axes 2,00,000(4) Net incomeafter taxes 1,00,000(5) Book debtsas

on 1tt April 2OO5 3,50,000You are required o calculate he following ratios :(i) Debtors'TurnoverRatio(ii) Proprietaryratio(iii) Current ratio(iv) Grossprofit ratio(v) Net profit ratio 10

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2. (i) What is meant by time value of money ?(ii) Explain the following with the help of examples :

(a) Effective vs. Nominal rates(b) Annuity(c) Sinking Fund Factor

Explain in detail the role and functions of treasurynutnagementDefine working capital and explain the various sources ofworking capital. Distinguish between Commercial bill ofexchange and Commercial paper.The present credit terms of Vijay and Cornpany areL/IO, net 30. Its sales are Rs. 12 crore, its averagecollection period is 24 days, its variable cost to sales ratiois 0'80 and its cost of funds is I5o/o. The proportion ofsales on which customers currently take discount is 0'3.The company is considering relaxing its terms to 2/L0, net30. Such relaxation is expected to increase the proportionof discount sales to 0.7 .

1 0

20

20

What will be the effect of relaxing the discount policy onnet profit ? The tax rate of the firm is 50o/o. 20

442

3.

4.

5.

6. Write short notes on :(a) Factoring(b) Ecomomic Order Quantity(c) ABC Analysis(d) Internal Rate of Return

20

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