Management Accounting — Winter 2021

Define the terms

Capital

Debtor

Working Capital

Fixed Assets

Trade Discount

Accounts Payable

Contingent Liability

State the difference between the Journal and Ledger.

Journalize the following transactions in the books of Mr. Ram for 2019: 1. He installed machinery of Rs.20,000 and paid wages for installation Rs.2,000. The machinery was supplied by M/s. Surya Brothers. 2. He withdrew goods for personal use costing Rs.5,000 (Sales Value Rs.6,000). 3. He purchased goods of the invoice value of Rs.10,000 at 10% trade discount from Suresh. 4. Salaries Paid Rs.10,000 after deducting Rs.1,000 as income tax, Rs.1,500 as employee’s share of provident fund but before employer’s share of provident fund Rs.1,500. 5. Amount earlier due from Sidharth Rs.5,000 written-off as bad debts was now recovered in full. 6. Amount paid to Suresh Rs.8,500 in full settlement. 7. Income tax liability of Ram Rs.1,000 pad in cash.

Fast Company has purchased a plant to manufacture a new product, the cost data for which is given below: Estimated Annual Sales 24,000 units Estimated Costs: Materials Rs.4 per unit Direct Labour Rs.0.60 per unit Factory Overheads Rs.24,000 per year Administration Overheads Rs.28,800 per year Selling Expenses 15% of Sales Calculate the selling price if the profit per unit is Rs.1.02. Prepare the cost-sheet showing the break-up of the cost at each stage.

Explain any seven Generally Accepted Accounting Principles.

If an asset was purchased for Rs.50,000 on 1st January, 2005, what should be its book- value four years after if it was depreciated according to the following methods:1. Straight Line Method and 2. Written Down Value Method. Anew machine costing Rs.10,000 was bought on 01/07/2008. The rate of depreciation is 10% per annum. Show your answer by a tabular ledger of Machinery Account incorporating both the methods in same ledger.

Write a short-note on Indian Financial Reporting Standard (IFRS).

The finished product of a manufacturing company passes through two processes, viz., I and II. The normal wastage in each process is 5% and 7% for Process-Iand II respectively. The scrap generated out of wastage has a sales value of 70 paise per unit, Page 1 of 80 paise per unit in the Process-Iand II respectively. There was no stock of Work-in- progress in any process in a particular month. The details of cost data for the month are given below: Particulars Process-I Process-II Material Used (Rs.) 1,20,000 40,000 Direct Labour Cost (Rs.) 80,000 60,000 Production Expenses (Rs.) 40,000 40,000 Output in Units (Actual) 38,000 34,600 Process-Iwas fed with 40,000 units of raw input at cost of Rs.3,20,000. Prepare the Process-Iand Process-II accounts.

Indicate any five circumstances under which you will allow to fix a price which is less than the marginal cost.

From the following data, calculate the cost of goods sold and closing inventory under First-in-First-Out (FIFO) and Weighted Average Cost Method (WAM) of inventory valuation. Also indicate which method shows higher valuation of Closing Stock. The opening stock in hand on 1st March was500 units @ Rs.10 per unit. (Purchase Price Per Unit) Purchases Issues 3rd March 500 units @ Rs.11 2nd March 400 units 10th March 1,000 units @ Rs.12 9th March 500 units 18th March 600 units @Rs.10 16th March 900 units 24th March 500 units @ Rs.12 23rd March 500 units 30th March 400 units @ Rs.13 31st March 600 units

Write a short-note on the classification of cost.

The sales and profit for two years are as below: Particulars Sales (Rs.) Profit (Rs.) 2011 1,50,000 20,000 2012 1,70,000 25,000 Calculate:

P/V Ratio

Fixed Cost

Prepare a Cash-Flow Statement on the basis of the information given in the Balance- Sheet of Parth Ltd. Liabilities 2011 2012 Assets 2011 2012 Share Capital 2,00,000 2,50,000 Goodwill 10,000 2,000 12% 1,00,000 80,000 Land and 2,00,000 2,80,000 Debentures Building General 50,000 70,000 Machinery 1,00,000 1,30,000 Reserve Creditors 40,000 60,000 Debtors 40,000 60,000 Bills Payable 20,000 1,00,000 Stock 70,000 90,000 Outstanding 25,000 20,000 Cash 15,000 18,000 Expense Total 4,35,000 5,80,000 Total 4,35,000 5,80,000

From the following ledger balances of Harshil Ltd. prepare the Balance-Sheet of the company as on 31st March, 2019 in vertical format. Also prepare the necessary schedule: Particulars Rs. Particulars Rs. Equity Share 26,00,000 Advances to 1,50,000 Capital employees Page 2 of General Reserve 30,000 Discount on 12,500 issue of Debentures 12% Debentures 4,00,000 Tools and 3,75,000 Equipments Land and 15,54,970 Gratuity Fund 3,00,000 Building Goodwill 10,00,000 Debtors 1,38,520 Bank Overdraft 2,45,100 Cash at Bank 1,57,160 Proposed 82,000 Stores and 1,77,800 Dividend Spares Prepaid 25,000 Profit and Loss 21,490 Insurance A/c (Cr.) Mutual Fund 68,000 Bills Receivable 44,600 Pre-Paid Salary 1,00,000 Sundry Creditors 90,000 Interest Payable 32,400 Bills Payable 2,560

From the following information extracted from the Balance Sheet of Good Luck Ltd for four previous financial years, calculate the trend percentages and interpret the result. Particulars 2005-06 2006-07 2007-08 2008-09 Assets: Land and 3000 3600 3600 3600 Building Plant and 6000 7200 7200 8400 Machinery Cash 600 720 1200 660 Bank 780 900 600 720 Debtors 1200 1800 3000 4800 Stock 2400 3600 5400 6000 Total 13980 17820 21000 24180 Liabilities: Equity Share Capital 5000 6000 6000 6000 Reserves and Surplus 4000 5080 7000 9180 Creditors 4000 5980 6000 5000 Bills Payable 980 760 2000 4000 Total 13980 17820 21000 24180