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Sixth Semester B.Com. Degree Examination,

September/October 2021

(CBCS Scheme)
Commerce

Paper 6.4 - MANAGEMENT ACCOUNTING

Time: 3 Hours] (Max. Marks : 70

Instructions to Candidates : Answer should be written completely either in English

or in Kannada.

SECTION - A/32JYr -
Answer any FIVE sub-questions from the following. Each correct answer carries
2marks : (5 x 2 = 10)

1. (a) Give the definition of Management Accounting.

(b) What do you mean by Financial Statement Analysis?

(c) How do you calculate Return on Capital Employed?

(d) State the objectives of Management Reporting.

(e) Give the meaning of Cash Flow Statement.

() What is the meaning of funds from operations?

(g) Given Current Assets 3,00,000; Inventories ? 70,000 and Working Capital
71,80,000. Calculate Current Ratio.
sd B e de. 3,00,000; wONORieo 70,000 bYro so wossN do. 1,80,000.

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SECTION - B/3JYri -
Answer any THREE questions of the following. Each correct answer carries
6 marks : (3 x6 = 18)

2. From the following Profit and Loss Accounts prepare Comparative Income
Statement.
Particulars 31-3-2020 31-3-2021 Particulars 31-3-2020 31-3-2021

To Cost of Goods By Sales 18,00,000 19,00,000

Sold 8,00,000 7,000 6.000
8,50,000 By Dividend
To Administration By Profit on sale
of Land 6.000 8.000
Expenses 90,000 95,000
To Selling expenses 19,000 20.000

To Depreciation 5,000 6,000

To Loss on Sale of

Machinery 3,000 900

To Interest paid 8,000 7,000
To Income ta: 85,000 1,00,000
To Net profit 8,03,000 8,35, 100
18,13,000 19,14,000 18,13,000 19,14,000
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3. From the following balance sheets prepare a Schedule of Changes in Working

Capital.
Balance Sheets as 31 *March
Liabilities 2019 2020 Assets 2019 2020

Equity share capital 1,20,000 1,80,000 Land & Building 80.000 1.23.000

Preference share capital 1,50,000 4,00,000 Plant &% Machinery 3,34,000 6,00,000
Profit & Loss A/c 14.000 18,000 Temporary
Long-term Loans 1,15,000 1,30,000 Investments 1,000 40,000
Bills payable 2,000 Stock 10,000 25.000
Sundry creditors 12,000 4,000 Book Debts 4,000 8,000
Outstarnding Prepaid expenses 1.000 2,000
Expenses 22,000 10,000 Cash & Bank 8.000 30,000
Proposed Dividends 10,000 90,000 Preliminary
expenses 7.000 4,000
4,45,000 8,32,000 4.45,000 8,32,000
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4.
rOm the following you are required to find out Cash Generated from Operations
of G Ltd. The company had profit of 3,50,000 for the year ended 31* March
2021 after considering the following :
(a) Depreciation on Buildingfor the year 26,000
(b) Depreciation on plant for the year 8,000
(c) Goodwill written off 6,000
(d) Loss on sale of machinery ? 2,000
The current assets and current liabilities position is :
Particulars 31-3-2020 31-3-2021

Stock 1,40,000 1,70,000

Cash 1,30,000 1,00,000
Debtors 1,10,000 94,000
Creditors 90,000 1,00,000
Outstanding rent 10,000 6,000
Bills payable 80,000 70,000
Bills receivables 90,000 1,06,000
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5 You are given :

Gross sales 4,30,000

Sales returns 18,000
Purchases 2,99,320
Gross profit 1,07,120
Net profit 49,440
Opening stock 79,000
Closing stock 73,440
Compute :
(a) Gross Profit Ratio
(b) Net Profit Ratio
(c) Cost of Goods Sold and
(d) Stock Turnover Ratio

4,30,000
18,000
aDdeorie 2,99,320
1,07,120

49,440
79,000
73.440

(c)
(d)

6. Briefly explain the requisites of a good management reporting system.

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SECTION - C/ SJ•r

Answer any THREE questions from the following. Each correct answer carries
14 marks : (3 x 14 =42)

adnj)TAHdo dued) triet eudo3, JJalood ajgn 14 odrie):

7. From the following Balance Sheet of X Ltd. and Y Ltd. as on 31-12-2020,
Compare the financial position of the companies with the help of Common-Size
Balance Sheet and Comment.
XLtd. Y Ltd.
Liabilities X Ltd. Y Ltd. Assets

Goodwill 2,30,000 1,80,000

Share capital 6,84,000 9,00,000
12% Debentures 1.00.000 2,00,000 Land & Building 4,00,000 3.40.000

Plant & Machinery 1,60,000 4,00,000

10% Preference

3,00,000 2,00,000 Investments 1,00,000 2,00,000

share capital
Stock 1,54,000 2,18,000
Reserves and
Sundry Debtors 3,20,000 4,00,000
Surplus 80,000 1,40,000
96,000 Bills receivable 40,000 60,000
Profit and Loss A/c 60,000
1,00,000 Cash and Bank 50,000 36.000
Provision for tax 80,000
Sundry creditors 1,10,000 1,66,000

Bills payable 40,000 32,000

14,54.000 18.34.000 14,54,000 18,34,000
8. Following are the Balance Sheets of Ramlal Ltd.

Balance Sheets as at 31st March

Liabilities 2019 2020 Assets 2019 2020

5,00,000 5,00,000 Land and Building 1,80,000 2,00,000

Share capital
General Reserve 2,00,000 2,20,000 Plant and

Profit & Loss Account 40,000 32,000 Machinery 2,10,000 2.76.000

Bank Loan Other Fixed Assets 30,000 45,000

(Long Term) 1,00,000 Investments 50,000 50,000

Creditors 1,58,000 1,72,000 Stock 2,00,000 1,90,000

Provision for Tax 45,000 30,000 Debtors 1,70,000 1,95,000

Cash 1,03,000 98,000

9.43,000 10,54,000 9,43,000 10,54,000

Additional Information :
(a) Dividend amounting to ? 30,000 was paid
(b) Provision for taxation made 12,000
(c) Machinery worth ? 15,000 was sold for 3,000
(d) Investment costing 10,000 was sold for 12,000
(e) Depreciation provided on assets - Land and Building 25,000 and Plant
and Machinery 20,000
Prepare a statement of Sources and Application of Funds.

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J3&rid):

2019 2020
2019 2020

1,80,000 2,00,000
5,00,000 5,00,000 doD Bd) ded
2,00,000 2,20,000 5•Jd dd) abog 2,10,000 2,76,000
30,000 45,000
32,000
&Aatried 50,000 50,000

(deg•FI) 2,00,000 1,90,000

1,00,000
1,58,000 1,72,000 aibonie 1,70,000 1,95,000

45,000 30,000 1,03,000 98,000

9,43,000 10,54,000 9,43,000 10,54,000

(a)
(b) 3onreA 12,000 aezOdeSA
(c) ? 15,000 selvaos oibos,J? 3,000n J•AJRDTSD't.

(d) ? 10,000 Jsd aoddaUi ? 12,0008, JDTOJDdSNO.

(e

9 State with reasons whether the tollowing

transactions result in increase or
decrease of working capital or do not affect the working capital
(a) Issue of shares worth 5,00,000 for cash
(b) Redemption of Debentures 2,20,000
(c) s0000 was transferred tromn
PTotand Loss Account to General
Reserve
(d) Creditors account for 75,000 were settled at
5% discount
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(e) Insurance premium 10,000 paid included 2,000 pre-paid insurance

premium
(f Advance income tax paid 30,000
(g) Preliminary expenses written off 20,000
(h) Interest received 5,000
(i) Bad debts written off during the previous years recovered? 1,500
(i) Long term investments were sold for ? 30,000.

(a) oia dosdO 5,00,000 3D,d Bedorie 03UB

(b) J•OIIne •0T•II 2,20,000
(c)
(d) 75,000riea), dardno se. 5d ioBaibO a,gr aDdeYNd.
(e)
(f)
g)
(h) 2a s00aib eBOId? 5,000
(i)

(G) SrgFd soatrida) 30,0008, so0ENIeYNd.

10. Following are the financial statements of X Co. for the year ended 31st
December 2020.
Balance Sheet as on 31st December 2020

Liabilities Assets
Equity Share capital Land & Building 3,50,000
(R5 each) 5,00,000 Plant & Machinery 2,50,000
General Reserve 1,40,000 Stock 2,80,000
Profit & Loss Account 2,00,000 Sundry Debtors 2,20,000
8% Debenture capital 2,00,000 Cash & Bank 1,00,000
Sundry creditors 1,60,000
12,00,000 12,00,000

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2020
vear ending 31st December
Profit and Loss Account for the
Particulars
Particulars
16,00,000
1,00,000 By Sales (Credit)
To Opening stock
By Closing stock
2,00,000
To Purchases (Credit) 8,00,000

To Gross profit c/d 9,00,000

18,00,000
18,00,000

9.00,000
To Administration By Gross Profit b/d

Expenses 2,00,000 By Profit on sale of

25,000
Assets
To Selling expenses 1,00,000

ToOther operating
Expenses 9,000

To Interest on

Debentures 16,000

To Net Profit 6,00,000

9,25,000
9,25,000

Compute :
Current Ratio
(a)

(b) Liquid Ratio

Operating Cost Ratio
(c)

(d) Return on Total Assets Ratio

Fixed Assets Turnover Ratio

(e)

() Debtors'Turnover Ratio
Creditors Turnover Ratio
(g)

(h) Proprietary Ratio

() Earnings Per Share

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(a)

(c)

(e)

()

(g)

(i)

2020 were as
11. The balance sheet of ALPHA Ltd. for the years ending 2019 and
follows :
Balance Sheets as at 31st March

Liabilities 2019 2020 Assets 2019 2020

Share capital 1,00,000 1,00,000 Buildings 1,10,000 1,50,000

Profit & Loss A/c 50,000 75,000 Plant 2,00,000 1,40,000
1,60,000 1,00,000 Stock 50,000 45,000
Loan from Bank
Creditors 85,000 93,000 Debtors 70,000 80,000
Cash 15,000 22,000
Qutstanding
expenses 5,000 7,000 Prepaid expenses 5,000 3,000

Bills payable 50,000 40,000

Short-term Loan

FromIFCI 25,000

4,50,000 4,40,000
4,50,000 4,40,000

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Additional Information:
(a) Net profit for the year ending 31 t March 2020 amounted to 60,000.

(b) During the year a plant costing ? 25,000 (accumulated depreciation

7 10,000) was sold for 13,000.

(c) The provision for depreciation against plant as on 31t March 2019 was
R50,000 and on 31t March 2020 was 85,000.

You are required to prepare a Cash Flow Statement as on 31st March 2020 as per
AS -3(Indirect Method).

2019 s•r 20208 aA`rAOd darren ALPHA Ltd. sgos 338deo 8UNsol3:

2019 2020 2019 2020

1,00,000 1,00,000 atriO 1,10,000 1,50,000

50,000 75,000 JO 2,00,000 1,40,000
we,o8Nod sdd RO 1,60,000 1,00,000 50,000 45,000
85,000 93,000 atbeðrie 70,000 80,000
15,000 22,000
5,000 7,000

5,000 3,000
50,000 40,000

IFCIOocd

25,000

4,50,000 4,40,000 4,50,000 4,40,000

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