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     CS-54 : FINANCE & ACCOUNTING ON COMPUTERS

                        DEC 2002

 

Note : There are six questions in this paper. Question no. 1 is compulsory and carries 30 marks. From the remaining five questions attempt any three questions, each of which carries 15 marks.

 

 

1(a) Write short notes on any two of the following :                   [10]

(i) Shareholders’ Funds

(ii) Cost of Capital

(iii) Business Entity Concept

(b) How does Management Accounting differ from Financial Accounting? Explain briefly, how management accounting helps the Management of a company in making its decisions.        [10]

(c) State the various factors that affect the capital structure of a company.                                       [10]

 

2  From the following information relating to Smith Sons, calculate the break-even point and the turnover required to earn a profit of Rs. 3,00,000.

                                    Rs       .

      Fixed Overheads        2,10,000 (total)

      Variable Costs                  20 per unit

      Selling Price                50 per unit

If the company is earning a profit of Rs. 3,00,000, what is the margin of safety available to it? Also state the significance of this margin.                                        [15]

 

3(a) What do you mean by budgetary control? State its objectives.                                    [6]

(b) Discuss the budgetary control ratios and how they are calculated.                                        [9]

 

4 A manufacturing concern which has adopted standard costing, furnishes the following information :                           [15]

Standard :

Materials for 70 units of finished product            100 kg

Price of material per kg                    Re. 1

Actual :

Output              2,10,000 units

Materials used     2.80,000 kg

Cost of Materials   Rs. 2,52,000

Calculate Material Usage Variance, Material Price Variance and Material Cost Variance. Also state the possible causes of Material Usage Variance.

 

5 The following are the Balance Sheet and Profit and Loss Account of H.S.G. Ltd :                                   [15]

 

          

Compute :

(i) Return on Investment

(ii) Return on Net Worth

(iii) Earning per Share

(iv) Investment Turnover Ratio

(v) Current Ratio

 

6 “While formulating a dividend policy, the Management has to reconcile company’s need for funds with the expectations of the shareholders.” Elaborate this statement and state the policy goals which have to be kept in view by the Management while taking a decision on dividends.                                                         [15]