ASSIGNMENTProgram: Diploma in Business Management. Semester: 1 Permanent Enrolment A1923913008(el) No. Roll Number (SEN) EL2013-02-STC00153443 Student Name Vishal Kiran Dhoble. Subject Name Accounting For Managers INSTRUCTIONS a) Students are required to submit all three assignment sets. ASSIGNMEN DETAILS MARKS T Assignment A Five Subjective Questions. 10 Assignment B Three Subjective Questions+ Case Study. 10 Assignment CObjective or one line 10 questions. b) Total weight age given to these assignments is 30%. OR 30 Marks 000 half of the building is used by the proprietor for residential use. b) Paid fire insurance of the above building in advance $ 1. √ ) Tick mark in front of the assignments submitted Assignment √ Assignment √ Assignment √ ‘A’ ‘B’ ‘C’ ASSIGNMENT-A Question 1 Journalize the following transactions in the books of Mr.000.c) All assignments are to be completed as typed in word/pdf. . c) Paid life insurance premium $ 2. Walter: a) Paid rent of building $ 12. d) Paid income-tax $ 3. d) All questions are required to be attempted.000.000. 000) at 18% p.000) at 15% p.a. for 2 months.F Debit( in $) Credit( in $) DR To Cash A/c (Being Paid Rent of the Building) Drawing A/c DR To Cash A/c (Being Paid Fire Insurance) Drawing A/c DR To Cash A/c (Being Paid Life Insurance) Salary A/c DR To Cash A/c (Being Paid Salary to Clerk) - 12. ANSWER Date 01-04-13 02-04-13 03-04-13 04-04-13 Particulars Drawing A/c L.000 500 . for 6 months.000 - 500 12. j) Charge interest on loan to Shyam ($ 200. k) Received commission $ 1. for 6 months.000) at 18% p. l) Brokerage due to us $ 500. for 1 month (furniture $ 12.a.a.e) Salary due to clerk $ 500.000 half of which is in advance. i) Provide interest on loan to Ram ($ 100.000 - 2.000 - 1.000) at 18% p.a. for 2 months.000). h) Charge interest on drawing (10. g) Provide interest on capital ($ 60.a. f) Charge depreciation on furniture @ 10% p.000 2.000 1. 200 Wages 35. XYZ ‘ Drawings 13.500 900 3.4.500 Mr.200 . XYZ’s Capital $ 228.200 4.000 - 500 Brokerage A/c To Cash A/c (Being Brokerage due to Us) - 500 DR 1.2007 38. $ Mr. XYZ.800 Stock 1.200 - 4.000 500 500 Question 2 From following figures extracted from the books of Mr.05-04-13 06-04-13 07-04-13 08-04-13 09-04-13 10-04-13 Depreciation A/c DR To Cash A/c (Being Charged Depreciation on Furniture) Capital A/c DR To Interest A/c (Being got Interest on Capital) Interest A/c DR To Drawing A/c (Being Charged Interest on Drawing ) Ram A/c DR To Interest A/c (Being Provided Interest on Loan to Ram) Advance Commission A/c DR To Commission A/c - 1. 2008 and a Balance Sheet as on that date after making the necessary adjustments. you are required to prepare a Trading & Profit & Loss Account for the year ended 31st March.500 - 900 - 3. 000 Postage & Telegrams 1.760 Returns outwards 1.Plant & Machinery 99.440 .970 Salaries 13.500 Cash in hand sales 2. Krish 29.000 Insurance 1.750 Office rent 2.a.260 Factory lighting 1.) 5.100 Gas & fuel 2.100 Loan to Mr.540 Purchases 110.260 5.2007 Cash at bank Bills payable ANSWER Question 3 1.000 Freehold property 66.000 Provision for doubtful debts 880 Balance on 1.000 Sundry creditors 44. 44.200 Bad debts 660 Office Expenses 2. Krish @10% p.860 Discount A/c (Dr.100 Interest on loan to Mr.640 231.4.900 Sundry Debtors 29.500 Loose tools 2. 000 25.000 50. Prepare a Balance Sheet on the basis of this trial balance.62. Total no.000 47. Answer .000 1. Particulars Debit (in Rupees) Credit( in Rupees) Cash 10.000 Furniture 25.000 Trading & Profit & Loss 47.000 Ram 15.62.00.000 1.00.000 Rahim 50.000 Assets Cash Bank Furniture Rahim Amount 10.000 Capital 1.000 1.Following is the Trial Balance of M/s. In the view of growth opportunities in the near future the firm has been maintaining a policy of 45% payout.000 77.000 ANSWER BALANCE SHEET OF M/S TRINITY FOODS AS ON 30TH JUNE Liabilities Capital Ram Trading & Profit/Loss Amount 1.000 15.000 Question 4 Given below are the financial statements of Safal Enterprises.000 1. Trinity Foods as on 30th June 2007 (after closing Nominal Accounts).000 Bank 77. using the tool of ratio analysis comment on the profitability and liquidity position of the firm for the year 2006-07.62.62. of shares outstanding for the firm is 2.69crores. Current AssetsInventory/ T.84 Times 2.5% 3.06 Times 29.25=3 2.50 = 3.26/8.22 Times = 144/37.26/4.64/11.55 3. Quick Ratio: T. Total Asset Turnover= Sales/ Total Assets= 132/51.25 1. 5.25= 17.22/11.24 Times 38.54 Times 144/37.55 Fixed Asset Turn Over = Sales/ Not Fixed Assets = 132/31.56/8.25= 1. Current Liabilities= 29.71/60.07= 44.02-16.26-14.RATIO ANALYSIS OF SAFAL ENTERPRISES Particulars 2006 2007 1. Current Ratio= 29.96 Times Interest Earned= PBIT/Interest Expense = 24. 6.84 Times 8.50 = 3.18/3 Debt Ratio= Total Debt/ Total Assets = .52 4. 4.4 % 26.44 33.01= 7.18/11.71 33. 24/132= 9.36 = 80% 10% 15.96% 25. Payout and Retention Ratio= Dividends Paid/ Net Income 62.2% 15.5% 26.79/60.24/51.79 Question 5 Given below are the balance sheets of the two firms. Can the financial positions of the two firms be compared assuming that the two firms fall in the same industry? Answer Yes.96 10. The reason behind this is that all the accounts of both the companies are similar.7. 1.79/144= 10. ROE= Net Income/Total Owner 41.07 = 26. The Financial conditions and positions of the two firms can be compared assuming that the two firms fall in the same Industry. .96 Debt to Equity Ratio= Total Debt/Total Equity= 20/31/96 Profit Margin= Net Income/ Sales= 13.24 15. 20/51. ROA= Net Income/Total Assets = 13.4% Equity= 13.36= 47.48 % 15.24/31/96 11. 8.71/33.79/33.Gloria Ltd and Victoria Ltd as on 31st March 2007.3 % 13. 2.4000 Output 415 Tonnes ANSWER Process ‘A’ Account DR CR Particular Quantity Amount Particular Quantity Amount .ASSIGNMENT-B Question 1 Find out the cost of raw material purchased from the data given below: Particulars Rs. 000.000 Direct Labour Cost 1.00. From the following information relating to process A for the month of August 2007. Materials 500 Tonnes Cost Of Materials Rs. Prime Cost 2. 90.000 Closing Stock of Raw Material 20. It is ascertained that in process A normally 5% of the total input is scrap which realizes Rs.000 Expenses on Purchases 10.000 ANSWER Cost of Raw Material Purchases is Rs. Question 2 The product of a manufacturing concern passes through two processes ‘A’ and ‘B’ and then to finished stock. 80 per tonne.14000 Manufacturing Overheads Rs.125/Tonne Wages Rs. prepare process ‘A’ account.00. 000 per month.000 To Overhead 4. 6.’ Luxury’. It has been proposed to change the sales mix as follows. The operating costs are: Ambience 60% of selling price Luxury Luxury 68% of selling price Comfort Comfort 80% of selling price Lavish Lavish 40% of selling price The fixed costs are $. ’Comfort’ and ‘Lavish’. 159. Calculate the breakeven point for the products on an overall basis.000 25 2.000 per month.000 14. a. The sales mix in value comprises the following: Brand name Percentage Ambience 33 1/3 Luxury 41 2/3 Comfort 16 2/3 Lavish 8 1/3 -----100 The total budgeted sales (100%) are $ 600.500 Question 3 Ahmedabad Company Ltd.000: Brand Name Percentage Ambience 25 Luxury 40 Comfort 30 Lavish 05 --- .To Material (in Tonnes) 500 To Labour (In Rupees) 62.000 500 80. b.00. manufactures and sells four types of products under the brand name ‘Ambience’. with the sales per month remaining at $.500 By Normal Loss (in Tonnes) 25 (In Rupees) 2. Is the profitability performance of the firm satisfactory? If not. calculate the new breakeven point. Answer.100 Assuming that this proposal is implemented.65.875 Comfort Fixed Cost/Contribution Margin 7.95.True 3. Answer. Accounting is a language of business.500 Luxury Fixed Cost/Contribution Margin 4. how can it be improved? ANSWER ASSIGNMENT-C State whether the following are ‘true’ or ‘false’: 1. . ANSWER Ambiance NEW BREAK EVEN POINT Fixed Cost/Contribution Margin 3. Accounting is a service function.96.True 2.000 Case Study Questions 1.97. Accounting records only those transactions and events which are financial character.000 Lavish Fixed Cost/Contribution Margin 2. Answer. Answer. Goods bought for resale are referred to as Stocks.Answer.False 14.False 8. The system of recording transaction on the basis of their two old aspects is called double entry system. Cash book is used to record all receipts and payments of cash. If the business has any liability.True 10. the proprietor’s capital must be more than the total assets. Answer. Answer. Answer. Answer. Answer.True 9. Purchases made from B for cash should be debited to B. Answer. Answer.True . Earnings of revenue means increase in Cash/Bank balance. Withdrawal of money by the owner is an expense for the business.True 7. Goodwill is an intangible asset. The balance of an account is always known by the side which is shorter.True 4.False 11.True 15.False 12. Answer.False 18. Answer. Sales book is used to record all credit sales. Answer. Ledger is called the book of final entry.False 17. The journal is not a book of original entry.True 16.True 6. Answer. Drawings reduce capital. Capital is increased by profit and decreased by losses. Answer.False 13. The return of goods by a customer should be debited to Returns Inwards Account.True 5. Answer. Shares which are not preference shares are called equity shares. similar to shares. Answer. In chemical industries unit costing is used. Debenture holders are not the member of the company.True 32. Selling overheads form a part of cost of production. Salaries & Wages appearing in the trial balance are shown on the liabilities side of the balance sheet. The profit & loss account is one of the financial statements.True 23. Answer.True 33.False 31.True 21. The amount of share premium received by the company is shown under the heading reserves & surplus in the company’s balance sheet. Answer. Answer. Share having preferential right as to dividend and repayment of capital are termed as equity share capital. Answer. Answer.False 30.True 24.True 22.True 20.False 27. Direct cost is that cost which can not be easily allocated to cost units. . Answer.19. Answer. Answer. Variable cost per unit remains fixed. Answer. Fixed cost per unit remains constant. The output of a process is transferred to next process. Answer. There are no legal restrictions. Answer. Manufacturing and administrative overheads are different. for issue of debentures at discount. Answer. Total fixed cost remains unaffected by the change in volume of output.True 26.False 28.True 25. Answer.False 29. Answer.True 38. Answer. Answer.Answer.True 39.True 35.False . Sales below BEP mean profit. In marginal costing. A firm earns no profit or incurs no loss at BEP.True 34.True 37. Excess of pre-estimated loss over actual loss is known as abnormal loss. stock is valued at fixed costs. Good units bear the abnormal loss arising in the process costing. Answer.True 36. Answer. Marginal costing is a method of ascertaining cost. Margin of Safety implies ‘Break Even Point’. Answer.True 40. Answer.
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