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MS-04 - Accounting and Finance for Managers
Note : Attempt all the questions and submit this assignment on or before 30 th April, 2013 to the coordinator of your study center.
1. Explain in detail the various accounting concepts and discuss the application of these concepts in the preparation of financial statements.
2. Fairdeals Ltd. presents the balance sheets as at 31.12.2009 and 31.12.2010 as follows:
|
31.12.09 |
31.12.10 |
Assets |
Rs. |
Rs. |
Fixed Assets at cost |
31,30,000 |
36,05,000 |
Less: Depreciation |
6,80.000 |
8,20,000 |
|
24,50,000 |
27,85,000 |
Investments |
12,50,000 |
13,50,000 |
Marketable Securities |
60,000 |
30,000 |
Inventories |
4,10,000 |
5,20,000 |
Book Debts |
5,30,000 |
5,05,000 |
Cash and Bank |
1,20,000 |
1,40,000 |
Preliminary Expenses |
1,00,000 |
50,000 |
|
49,20,000 |
53,80,000 |
Liabilities |
||
Share Capital |
20,00,000 |
25,00,000 |
Reserve and Surplus |
4,20,000 |
4,70,000 |
Profit and Loss Account |
3,80,000 |
4,00,000 |
13.5% Debentures (Convertible) |
10,00,000 |
8,00,000 |
Mortgage Loan |
3,00,000 |
2,50,000 |
Current Liabilities |
8,20,000 |
9,60,000 |
|
49,20,000 |
53,80,000 |
You are informed that during 2010
(i) Rs. 2,00,000 of debentures were converted into shares at par;
(ii) Rs. 1,00,000 shares were issued to a vendor of fixed assets;
(iii) A machine costing Rs. 50,000 book value Rs. 30,000 as at 31 st December, 2009 was disposed off for Rs. 20,000;
(iv) Rs. 30,000 of marketable securities (cost) was disposed off for Rs. 36,000.
You are required to prepare a schedule of working capital changes and funds flow statement of the company for 2010.
3. An Analysis of S Ltd. cost records give the following information.
|
Variable Cost |
Fixed Cost |
|
(% of Sales) |
Rs. |
Direct Material |
32.8% |
- |
Direct Labour |
28.4 |
- |
Factory Overhead |
12.6 |
1,89,000 |
Distribution Overhead |
4.1 |
58,400 |
Administration Overhead |
1.1 |
66,700 |
Budgeted sales for the next year is Rs. 18, 50,000. You are required to determine:
(A) Break even sales value
(B) Profit at the budgeted sales volume
(C) Profit if actual sales: (i) drop by 10% (ii) increase by 5% from the sale.
4. Briefly explain the following
(A) Rolling budget
(B) Performance budgeting
(C) Zero base budgeting
(D) Measures of financial beverage
5. What is capital structure? Explain the features and determinants of an appropriate capital structure.