Bachelor Of Management Studies (BMS) SEM III 2017 2018 March 2018 ACCOUNTING FOR MANAGERIAL DECISION Question Paper - Mumbai University | munotes

Questions asked in this paper

• (2) Figures to the right indicate full marks

1. Q1 (A) Rewrite the full sentence with correct option (Attempt Any Eight) : 8 marks
   • (1) Short term obligations which are payable within the operating cycle period or within a year are called
   • (2) Underwriting commission is a/ an :
   • (3) Debt equity ratio is a/.an
   • (c) Income statement ratio (d) None of the above
   • (4) is an example of liquidity ratio
   • (c) Return on proprietor's funds (d) Debtors turnover ratio
   • (5) flow statement, redemption of debentures is shown as
   • (a) Cash flow from operating activities
   • (b) Cash flow from investing activities
   • (c) Cash flow from financing activities
   • (d) None of the above
   • (6) Buy-back of equity shares creates cash flow from
   • (c) Investing activities (d) None of the above
   • (7) The minimum amount of working capital required by a concern to enable it to operate at the lowest level of activity is called M0133 S.Y.B.M.S. (CHOICE BASE) (SEMESTER ACCOUNTING FOR MANAGERIAL DECISION
   • Q.P. Code : 22113
   • (8) Aconcern which allows longer period of credit to debtors requires
   • (c) Temporary working capital (d) No working capital
   • (9) offers cash discount to customers, it would lead to increase in
   • (a) Sales (b) Debtors
   • (c) Average collection period (d) All of the above
   • (10) The cost incurred to collect the dues from customers is called as
   • (c) Administration cost All of the above
   • (B) State whether the following statements are True or False (Attempt Any Seven): 7
   • (1) Goodwill should be shown under fictitious assets
   • (2) Interest on loan is disclosed separately in vertical income statement
   • (3) Short term solvency ratio measures the ability of the firm to pay current
   • (4) Debt collection period indicates time taken by debtors to settle the account
   • (5) Sale of machinery is a source of cash from financing activities
   • (6) Issue of share capital creates cash flow from financing activities
   • (7) Manufacturing organisations require higher working capital than trading
   • (8) Stock of finished goods should be valued at cost of production while
   • (9) Longer the production cycle, larger will be the requirement of working
   • (10) Ageing schedule of receivables is one way of monitoring the receivables ACCOUNTING FOR MANAGERIAL DECISION
   • Q.P. Code : 22113
2. Q2 Following is the Balance Sheet of Sai Ltd. as at 31“ March, 2016 : Bills payable Short term deposit 60,000 Present the above Balance Sheet in vertical form suitable for the purpose of analysis and show the following : 15 marks
   • (a) Intangible assets
   • (b) Current assets
   • (c) Shareholders Funds
   • (d) Fictitious assets
   • (e) Quick liabilities
   • S.Y.B.M.S. (CHOICE BASE) (SEMESTER III) /M0298 ACCOUNTING FOR MANAGERIAL DECISION
   • Q.P. Code : 22113
3. Q2 (A) From the following Balance Sheet of Lion Ltd. prepare statement of trend analysis in vertical form 10 marks
   • (B) From the following Balance Sheet of Soham Ltd. prepare commonsize Balance 05 M0133 S.Y.B.M.S. (CHOICE BASE) (SEMESTER ACCOUNTING FOR MANAGERIAL DECISION
   • Q.P. Code : 22113
4. Q3 Following are the financial statements of Sia Ltd. for 2016: Trading & Profit and Loss A/c for the Balance Sheet as at March, 2016 Calculate the following ratios : 15 marks
   • (e) Debtors turnover ratio (f) Return on capital employed
   • (g) Quick ratio Note : Converting the statements in vertical format is not expected ACCOUNTING FOR MANAGERIAL DECISION
   • Q.P. Code : 22113
5. Q3 Following are the financial statements of two similar companies : Balance Sheet as at March, 2016 Equity shares of 40,000} 40,000 12,000 Income statement for 2016 On the basis of above information, you are required to compute the following ratios for both the companies separately : 15 marks
   • (i) Current ratio Return on proprietors funds Note : Vertical final accounts need not be prepared M0133 S.Y.B.M.S. (CHOICE BASE) (SEMESTER ACCOUNTING FOR MANAGERIAL DECISION
   • Q.P. Code : 22113
6. Q4 Following are the Balance Sheets of Nalini Ltd. as on 31* March, 2016 and 15 marks
   • (i) Dividend of was paid during the year ended 31* March, 2017
   • (ii) Depreciation was provided on Land & Building, Plant & Machinery and Equipment for the year ended March, 2017 (iit) Machinery of =50,000 and equipment of were acquired during the
   • (iv) Income tax provision for was made for the year ended 31 Prepare cash flow statement by Indirect method as per AS-3 for the year ended
7. Q4 (A) The management of Radha Industries has called for a statement showing the working capital to finance a level of activity of 1,80,000 units of output for the year. The cost structure for the company's product for the above mentioned activity level is detailed below : M0133 S.Y.B.M.S. (CHOICE BASE) (SEMESTER ACCOUNTING FOR MANAGERIAL DECISION 8 marks
   • Q.P. Code : 22113
   • (a) Minimum desired cash balance is =20,000
   • (b) Raw materials are held in stock, on an average for two months
   • (c) Work-in-progress (assume 50% completion stage) will approximate to half
   • (d) Finished goods remain in warehouse, on an average for one month
   • (e) Suppliers of material extend one month's credit and debtors are provided two month's credit; cash sales are 25% of total sales From the above facts, you are required to prepare a statement showing working
   • (B) Suyash Ltd. is considering the revision of its credit policy with a view to increasing 07 its sales and profit. Currently all its sales are on credit and the customers are given one month credit. The companies required rate of return on investment is 20%. It has a contribution of 40%. The marketing manager has been given the Cost of credit 1.20 1.30 1.50 Advise the company for the best option
8. Q5 (A) What are the components of financial statements ? Explain the objectives of 8 marks
   • (B) Explain working capital cycle for a manufacturing concern. 07 ACCOUNTING FOR MANAGERIAL DECISION
   • Q.P. Code : 22113
9. Q5 Write short notes on (Attempt Any Three) : 15 marks
   • (1) Cash flow from financing activities (as per revised AS-3)
   • (3) Advantages of Common size statements
   • (4) Contingent Liabilities
   • (5) 5C's of credit evaluation

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