Bachelor Of Management Studies (BMS) SEM III 2017 2018 Nov 2018 MANAGERIAL DECISIONS Question Paper - Mumbai University | munotes

Questions asked in this paper

• (2) Figures to the right indicate full marks

1. Q1 (A) Attempt any 8 from the following : Multiple choice questions (Rewrite the full sentence with correct option) 8 marks
   • (1) Gross Profit is
   • (a) Excess of sales over purchases
   • (b) Excess of sales over total cost
   • (c) Excess of sales over cost of Raw materials
   • (d) Excess of sales over cost of goods sold
   • (2) An asset which does not have physical identity is called as
   • (a) Current asset
   • (b) Intangible asset
   • (c) Fixed asset
   • (b) Operating efficiency
   • (c) Collection efficiency
   • (d) Short term financial position
   • (4) Borrowed funds does not include
   • (a) Debentures
   • (b) Public Deposits
   • (c) Bank Overdraft
   • (d) Bonds
   • (5). In cash flow statement, Goodwill written off is
   • (a) Added to Book Profit
   • (b) Deducted from Book Profit
   • (c) Treated as cash inflows
   • (d) Treated as cash outflows
   • (6) The excess current assets over current liabilities is called
   • (7). Shortage of working capital may result in M0133 M0298 ACCOUNTING FOR MANAGERIAL DECISIONS
   • (8) In response to market expectations the credit period has been increased from 30 days to 45 days. This would lead to 3
   • (a) Decrease in sales
   • (b) Increase in cost of goods sold
   • (c) Increase in average collection period
   • (d) Decrease in Debtors
   • (9) Credit evaluation of customer includes approval of
   • (a) Character
   • (b) Capital
   • (c) Capacity
   • (d) All of the above
   • (10) is an example of balancesheet ratio
   • (B) State whether the following statements are true or false (Attempt any 7) : 7
   • (1) Authorised capital is the minimum capital that can be raised by acompany
   • (2) Profit on sale of machinery is an operating income
   • (3) Liquid ratio indicates the company's ability to meet its long term liabilities
   • (4) High proprietary ratio indicates low risk for the creditors
   • (5) For purpose of the statement of cash flows, “Cash” includes cash on hand, cash in the bank and cash equivalents
   • (7) The permanent working capital will remain in the business until the business is closed down
   • (8) The statement of cash flows shows not only the amount of cash used during a particular time, but also how the cash was used
   • (9) Credit period is the time allowed to customers to pay for their purchases
   • (10) In order to minimize the level of receivables, a firm should follow a strict and aggressive collection procedure M0133 M0298 ACCOUNTING FOR MANAGERIAL DECISIONS
2. Q2 Following is the Balancesheet of Tiger Ltd. as on 31st March, 2016. Present the above Balancesheet in vertical form and calculate the following 15 marks
   • (3) Working capital
3. Q2 (A) You are furnished with the following Revenue statements. For the 3 years ended Cost of sales Interest on Loans You are asked to prepare Trend Analysis [TURN OVER M0133 FOR MANAGERIAL DECISIONS 10 marks
   • (B) From the following information for year ending 2016. Prepare common size statement in vertical form
4. Q3 The summarized accounts of Eagle Ltd. and Vulture Ltd. are as follows. Revenue statement for the year M0133 ACCOUNTING FOR MANAGERIAL DECISIONS You are required to calculate following ratios and comment on performance of the companies 15 marks
   • (2) Operating Ratio
   • (4) Return on propritors equity ratio Note :— Conversion of statements in vertical form not required
5. Q3 Calculate the Ratios for Leopard Ltd. from following information. Statement of profit for the year ended 31st March, 2016 Less : Cost.of goods sold Earnings Before Int. and Tax M0133 FOR MANAGERIAL DECISIONS Ratios to be calculated : 15 marks
   • (1) Current Ratio
   • (2) Liquid Ratio
   • (3) Proprietary Ratio
   • (4) Operating Ratio
   • (7) Return on Capital Employed Note : Conversion of statements in vertical form are not required
6. Q4 Falcon Ltd. gives you following Balancesheets for the year ended 31st March, 2016 and 2017. Prepare Cash Flows statements for the year ended 31st March, 2017 Balancesheet as on Profit and Loss A/c 28,080 43 560 39 480 Reserve for Bad Debts 3120 5100 15,840 3,240 15 marks
   • (1) Prefernece shares were redeemed during the year @10% premium
   • (2) Income Tax paid during the year Note : use Indirect Method as per AS3 (revised) M0133 ACCOUNTING FOR MANAGERIAL DECISIONS
7. Q4 (A) Dove Ltd. presents following information for yearly production. and sales = 60,000 units 8 marks
   • (1) The company extends 2 months credit to debtors
   • (2) The company maintains one month's stock of raw materials
   • (3) The company maintains one months stock of finished goods
   • (4) The processing period is one month
   • (5) The company is allowed two months credit by suppliers
   • (6) Wages and overheads are paid one month in arrears
   • (7) Cash Balance is expected to be = 25,000
   • (8) During the production process wages and overheads accrue evenly
   • (9) 20% of the customers pay one month in Advance Prepare statement showing an estimate of working capital
   • (B) Stork Ltd. has a present annual sales of 10,000 units at per variable 7 cost is 200 per unit and fixed cost amount to 3,00,000 per annum. The present credit period allowed by the company is 1 month. The company is considering a proposal to increase the credit period to 2 months and 3 months and has made The company plans on Pre-Tax return of 20% on investment in receivables You are required to calculate the most beneficial credit policy for the company
   • (A) Explain In detail of credit evaluation. 7
   • (B) Distinguish between Contingent liability and current liability. 8
8. Q5 Write short notes Attempt any 3 out of five (5 marks each) 15 marks
   • (1) Fictitious Assets
   • (3) Cash Flow from Investing Activities (As per Revised AS 3)
   • (4) Working capital cycle (For Trader)
   • (5) Limitations of Comparitive Statements

Read from the scan above, so a character or two may differ. The scan is the original.