Dr. Ambedkar Institute of Technology, Bengaluru 560056

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USN / IM73
B. E. Degree Seventh Semester End Examination (SEE) December 2013
FINANCIAL ACCOUNTING AND COSTING
(Model Question Paper – 3)
Time: 3 Hours ] / [ Maximum Marks: 100
Instructions to students:

Answer FIVE FULL questions.
Question No. 1, 2 and 5 are COMPULSORY
Answer ANY ONE from Question No. 3 and 4
Answer ANY ONE from Question No. 6 and 7

1. / a) / Differentiate between Journal and ledger . / [05 Marks]
b) / Journalize the following transactions in the books of James.
01/1/95- James commenced business with cash Rs.10000/-
03/1/95- Paid into bank Rs.1000/-
04/1/95- Bought goods for cash Rs.2000/-
05/1/95- Bought office furniture for cash Rs.500/-
06/1/95- Sold goods for cash Rs.600/-
07/1/95- Bought goods from Raman on credit Rs.500/-
10/1/95- Paid rent to the landlord Rs.500/-
12/1/95- Paid salary to the manager Rs.200/-
15/1/95- Sold furniture for cash Rs.500/-
16/1/95- Received commission Rs.50/-
18/1/95- Bought goods Rs.400/-
20/1/95- Sold goods Rs.600/-
22/1/95- Sold goods to Gopal Rs.500/-
23/1/95- Bought goods from Ram Rs.500/-
24/1/95- Bought goods from Rai for cash Rs.500/-
25/1/95- Paid postage Rs.50/-
26/1/95- Sold goods to Mohan for cash Rs.1000/-
27/1/95- Paid carriage Rs.80/-
31/1/95- Withdraw cash from the office for personal use Rs.200/- / [15 Marks]
2. / a) / Prepare the trading account, P/L, account from the trial balance for the period ending 31st Dec 1985 & balance sheet as on that date taking into account the following adjustment.
Particulars / Debt balance / Credit balance
Capital / 29000
Drawing / 760
Sales returns & purchase return / 280 / 450
Purchases & sales / 8900 / 15000
Opening stock / 1200
Wages / 800
Buildings / 22000
Carriage / 2000
Trade expense / 200
Advertisement / 240
Interest received / 350
Debtors & creditors / 6500 / 1200
Taxes & insurance / 130
B/R & B/P / 1500 / 700
Cash at bank / 1200
Cash in hand / 190
Salaries / 800
46700 / 46700
Adjustment / Amount
Closing stock was valued at / 1500
Insurance prepaid / 40
Salaries unpaid / 200
Taxes unpaid / 130
Depreciation building / 2%
/ [20 Marks]
3. / a) / What do you mean by “Accounting ratios”? What are the advantages of Ratio Analysis. / [05 Marks]
b) / Following are the figures related to the trading activities of Synopses for the year ended 30th June 2013.
Sales / 5200000 / Non recurring incomes
Opening stock / 76250 / Dividend / 9000
Closing stock / 98500 / Profit on sale of shares / 3000
Sales returns / 20000
Selling and distribution
Expenditures / Loss on sale of shares / 4000
Salaries / 15300
Advertisements / 4700
Administrative expenditure
Salaries / 27000
Rent and postage / 5200
Depreciation / 9300
Other charges / 16500
Provision for taxation / 40000
You are required to arrange the above in a suitable form for analysis and show the PL account ratios. / [15 Marks]
OR
4. / a) / Explain the elements of cost. / [05 Marks]
b) / The modern manufacturing company submits the following information on March31, 2013
`
Sales for the year / 275000
Inventories at the beginning of the year:
Finished goods / 7000
Work in progress / 4000
Purchase of materials / 1,10,000
Materials at the :
Beginning of the year: / 3000
End of the year / 4000
Direct labour / 65,000
Factory overhead was 60% of labour cost.
Inventories at the end of the year:
Finished goods / 8,000
Work in progress / 6,000
Other expenses for the year:
Selling expenses 10 % of sales
Administrative expenses 5% of sales
Prepare a statement of cost. / [15 Marks]
5. / a) / Define variance. Give the classification of variances. / [ 05 Marks]
b) / Calculate total material cost variance, MPV & MUV for the materials X and Y which is required to produce 1 unit of product A
Material / Std. Qty. (kgs) / Std. Price
(Rs. / kg) / Actual Qty. (kgs) / Actual price
(Rs. / kg)
X / 10 / 4 / 12 / 3.75
Y / 15 / 5 / 18 / 4.5
/ [ 15 Marks]
6. / a) / Brief on the factors influencing the working capital requirements / [ 06 Marks]
b) / The board of Directors of a company require you to prepare a statement showing working capital requirements forcast for a level of activity of 1,56,000 units of production for the year.The following information is available
Elements of cost / Amount per unit(Rs)
Raw material / 90
Direct labour / 40
Overheads / 75
Total cost / 205
Profit / 60
Selling price / 265
i) Raw materials are in stock for an average for 1 month
ii) Material are in process for an average for 2 weeks.
iii) Finished goods are in stock on an average for 1 month.
iv) Credit allowed by suppliers is 1 month.
v) Time lag in payment from debtors is 2 months
vi) Lag in payment of wages is 1.5 weeks.
vii) Lag in payments of overheads is 1 month.
All sales are on credit. Cash in hand and at bank to be Rs.60,000. It is assumed that production is carried out even the thoughout the year. Wages and overheads accrue evenly and 1 month=4 weeks. / [14 Marks]
OR
7. / a) / Brief on flexible budget. / [ 04 Marks]
b) / From the following information and assumption the balance on hand on 1st January 2006 is Rs.72,500/-
Month / Sales / Materials / Wages / Selling and Dist Overheads / Production Overheads / Admin overheads
Jan / 72,000 / 25,000 / 10,000 / 4,000 / 6,000 / 1,500
Feb / 97,000 / 31,000 / 12,100 / 5,000 / 6,300 / 1,700
March / 86,000 / 25,500 / 10,600 / 5,500 / 6,000 / 2,000
April / 88,000 / 30,600 / 25,000 / 6,700 / 6,500 / 2,200
May / 1.02,000 / 37,000 / 22,000 / 8,500 / 8,000 / 2,500
June / 1,08,500 / 38,800 / 23,000 / 9,000 / 8,200 / 2,500
i) Assume 50% cash sales.
ii) Assets are to be acquired in the month of February and April; the provision should be made for the payment of Rs.8,000 and Rs.25,000 for the same.
iii) An application has been made for the grant of loan of Rs.30,000 and it is hoped that it will be received in May.
iv) It is anticipated that a dividend of Rs.35,000 will be paid in June.
v) Debtors allowed 1 month credit.
vi) Sales commission at 3% of total sales has to be paid.
vii) Creditors (material and overheads) grant 1 month credit .
Prepare cash budget. / [16 Marks]

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Dr. Ambedkar Institute of Technology, Bengaluru – 560056

(An Autonomous Institution Affiliated to Visvesvaraya Technological University, Belgaum)