Fsdksjdhfkjsd fsdjfhdsrtrrr.docx

ASSIGNMENT :

NAME

AJIT KUMAR THAKUR

ROLL NO. : DRIVE : SEMESTER : SUBJECT CODE & NAME

:

BKI ID

:

1502000803 SPRING 2015 MBA/MBADS/MBAFLEX/MBAHCSN3/PGDBAN2 MB0041- FINANCIAL AND MANAGEMENT ACCOUNTING B1624

1. Analyze the following f ollowing transaction under traditional approach. 18.1.2011 Received a cheque from a customer, Sanjay at 5 p.m. Rs.20,000 19.1.2011 Paid Ramu by cheque Rs.1,50,000 20.1.2011 Paid salary Rs. 30,000 20.1.2011 Paid rent by cheque Rs. 8,000 21.1.2011 Goods withdrawn for personal use Rs. 5,000 25.1.2011 Paid an advance to suppliers of goods Rs. 1,00,000 26.1.2011 Received an advance from customers Rs. 3,00,000 31.1.2011 Paid interest on loan Rs. 5,000 31.1.2011 Paid instalment of loan Rs. 25,000 31.1.2011 Interest allowed by bank Rs. 8,000 Ans :-

Date

Accounts Involved

Nature of Account

Affects

18.1.11

Cash a/c Sanjay’s a/c Ramu’s a/c Bank a/c Salary a/c Cash a/c Rent a/c Bank a/c Advance to suppliers a/c Cash a/c Cash a/c Advance from customer a/c Interest on loan a/c Cash a/c Loan a/c Cash a/c Bank a/c Bank interest a/c

Real Personal Personal Personal  Nominal Real  Nominal  personal Personal Real Real  personal  Nominal Real Personal Real Personal  Nominal

Cash(Cheque)is coming Sanjay is the giver Ramu is the Receiver Bank is the giver Salary is expenses Cash is going out Rent is an expenses Bank is the giver Suppliers are receivers Cash is going out Cash is coming Customers are givers Interest is expenses Cash is going Lender is receiver Cash is going out Bank is the receiver Bank interest is an income

19.1.11 20.1.11 20.1.11 25.1.11 26.1.11 31.1.11 31.1.11 31.1.11

Debit/ Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit

2 The trial balance of Nilgiris Co Ltd., as taken on 31st December, 2002 did not tally and the difference was carried to suspense account. The following errors were detected subsequently.

a) Sales book total for November was under cast by Rs. 1200.  b) Purchase of new equipment costing Rs. 9475 has been posted to Purchases a/c. c) Discount received Rs.1250 and discount allowed Rs. 850 in September 2002 have been posted to wrong sides of discount account. d) A cheque received from Mr. Longford for Rs. 1500 for goods sold to him on credit earlier, though entered correctly in the cash book has been posted in his account as Rs. 1050. e) Stocks worth Rs. 255 taken for use by Mr Dayananda, the Managing Director, have been entered in sales day  book. f) While carrying forward, the total in Returns Inwards Book has been taken as Rs. 674 instead of Rs. 647. g) An amount paid to cashier, Mr. Ramachandra, Rs. 775 as salary for the month of November has been debited to his personal account as Rs. 757. Pass journal entries and draw up the suspense account. Journal entries of all the transactions Suspense account with Conclusion Ans:

Journal proper of Nilgiris co Ltd

Date

Particulars

31.12.2002

Suspense a/c Dr To sales a/c (Being under casting of sales book rectified) New Equipment a/c Dr To Purchase a/c (Being wrong debit given to purchase account rectified) Discount allowed a/c Dr Suspense a/c Dr To Discount received a/c (Being discount received and discount allowed posted to wrong sides of discount account rectified)

31.12.2002

31.12.2002

31.12.2002

31.12.2002

31.12.2002

31.12.2002

Suspense a/c Dr To Longford’s a/c (Being short credit given to Longford rectified) Sales a/c Dr To Return inward a/c (Being stock used for personal purpose wrongly credited to sales a/c rectified) Suspense a/c Dr To Return inwards a/c (Being excess debit given to returns inwards a/c to the extent of Rs 27, now rectified ) Salary a/c Dr To Ramachandra’s a/c To Suspense a/c (Being the wrong debit of salary to the personal accont of Ramachandra now rectified)

LF

Debit Rs. 1200

Credit Rs. 1200

9475

9475

1700 800 2500

450

450

255 255

27 27

775 757 18

Suspense Account Particulars To sales A/c To Discount received a/c To Longford a/c To Returns inward a/c

Amount 1200 800 450 27

Particulars By sales A/c By salary A/c By Balance c/d

Amount 255 18 2204

Total

2477

Total

2477

3. From the given trial balance draft an Adjusted Trial Balance.

Trial Balance as on 31.03.2011

Adjustments: 1. Charge depreciation at 10% on Buildings and Furniture and fittings. 2. Write off further bad debts 1000 3. Taxes and Insurance prepaid 2000 4. Outstanding salaries 5000 5. Commission received in advance1000 Preparation of ledger accounts Preparation of trial balance

Ans:

Ledger accounts

Dr

Furniture and fittings a/c

Cr

Particulars

Rs.

Particulars

Rs.

To balance b/d

10000

By depreciation a/c By balance c/d

1000 9000

Total

10000

Total

10000

to balance b/d

9000

Dr

Buildings a/c

Cr

Particulars

Rs.

Particulars

Rs.

To bal b/d

500000

Total

500000

By Depreciation By bal c/d Total

50000 450000 500000

To bal b/d

450000

Dr Particulars To bal b/d To Sundry Debtors Total To bal b/d 3000 Dr

Bad debts a/c

Cr

Rs. 2000 1000 3000

Particulars By bal c/d

Rs. 3000

Total

3000

Sundry debtors a/c

Cr

Particulars

Rs.

Particulars

Rs.

To bal b/d

25000

By Bad Debts

1000

By bal c/d

24000

Total

25000

To bal c/d Total

25000

To bal b/d

24000

Dr

Taxes and insurance a/c

Particulars

Rs.

Particulars

To bal b/d

5000

To bal c/d

By Prepaid taxes and Insurance

Total

5000

By bal c/d Total

To bal b/d

3000

Cr Rs.

2000 3000 5000

Dr.

Prepaid taxes & insurance a/c

Cr.

Particulars

Rs.

Particulars

Rs.

To taxes & insurance

2000

By bal c/d

2000

Total

2000

Total

2000

To bal b/d

2000

Dr

Salaries a/c

Cr

Particulars

Rs.

Particulars

Rs.

To bal b/d

By bal b/d

25000

To Outstanding Salaries

20000 5000

Total

25000

Total

25000

Total

25000

Dr

Outstanding salaries a/c

Cr

Particulars

Rs.

Particulars

Rs.

To bal c/d

5000

By salaries

5000

Total

5000

Total

5000

By bal b/d

5000

Dr

Depreciation a/c

Particulars

Rs.

To Furniture and fittings

1000

To Buildings

Cr Particulars

Rs.

50000

By bal c/d

51000

Total

51000

Total

51000

To bal b/d

51000

Dr

Commission a/c

Particulars

Rs.

To commission received in advance To bal c/d

1000 4000

Total

5000

Cr

Particulars

Rs.

By bal b/d

5000

Total

5000

By bal b/d

4000

Dr

Commission received in advance a/c Particulars

Rs.

To bal c/d Total

1000 1000

Cr

Particulars

Rs.

By commission

1000

Total

1000

By bal b/d

1000

Adjusted Trial Balance as on 31.03.2011 Debit balances Furniture and Fittings

Rs. 10000

Adjustments -1000

Adjusted amount 9000

Buildings

500000

-50000

450000

Sales Returns

1000

Bad Debts

2000

+1000

3000

Sundry Debtors

25000

-1000

24000

Purchases

90000

90000

Advertising

20000

20000

Cash

10000

10000

Taxes and Insurance

5000

General Expenses

7000

Salaries

20000

1000

-2000

3000 7000

+5000

25000

Depreciation

-

1000+50000

51000

Prepaid Taxes and Insurance

-

2000

2000

TOTAL

690000

690000

Credit balances  bank over draft

Rs. 16000

Adjustments

Capital account

400000

400000

Purchase return

4000

4000

Sundry creditors

30000

30000

Commission

5000

Sales

235000

Outstanding salaries

-

5000

5000

Commission received in advance

-

1000

1000

Total

690000

-1000

Adjusted amount 16000

4000 235000

690000

4. Compute trend ratios and comment on the financial performance of Infosys Technologies Ltd. from the following extract of its income statements of five years .

 Source: I nfosys Technologies Ltd.  –  Annual Report) Preparation of trend analysis Preparation of trend ratios Conclusion Ans  –  Particulars Revenue Operating profit (PBIDT) PAT from ordinary activities

Revenue Oprating profit(PBIDT) PAT from ordinary activities

Infosys Technologies Ltd Trend Analysis

2010-11 27501 8968 6835

2009-10 22742 7861 6218

Trend Ratios 197.95 163.69 204.24 179.03 177.26 161.26

2008-09 21693 7195 5988

156.14 163.86 155.29

2007-08

16692 5238 4659

120.15 119.29 120.82

2006-07 13893 4391 3856

100 100 100

Comment: The

Revenue and Operating Profit (PBIDT) have almost doubled in four years. The PAT from ordinary activities has increased by 77.26% in the same period

5. Give the meaning of cash flow analysis and put down the objectives of cash flow analysis. Explain the preparation of cash flow statement.? Meaning of cash flow analysis .? Objectives of cash flow analysis .? Explanation of preparation of cash flow analysis .? Ans: Meaning of cash flow analysis - Cash flow analysis is an important tool of financial analysis. It is the process of understanding the change in position with respect to cash in the current year and t he reasons responsible for such a change.

The analysis also helps us to understand whether the investing and financing decision taken by the company during the year are appropriate are not.

Cash flow analysis is presented in the for m of a statement. Such a statement is called a cash flow statement

Objectives of cash flow analysis Cash flow analysis is done with the objective of understanding some of the following important questions What is the change in the cash position of the firm for the current year as compared to the previous year?

:

How good was the liquidity position of the firm?

What were the sources of cash during the current year?

How much cash was generated from operations?

What were the applications of cash during the current year?

How much cash was spent on investment activities, such as purchase of new plant and machinery, purchase of land?

The preparation of cash flow statement is similar to the preparation of fund flow statement.

It requires the identification of the sources of cash and the us es of cash. A source of cash is a transaction which  brings an inflow of cash. An application of cash is a transaction which leads to an outflow of cash. It may be noted that the sources of cash increase the cash balance and applications of cash decrease the cash balance.

6. Write the assumptions of marginal costing. Differentiate between absorption costing and marginal costing. Assumptions of marginal costing (all 7 points), Differences of marginal and absorption costing (Includes all 8points) ?

Marginal costing is based on the following assumptions : -

Ans:

      

1. Segregation of cost into fixed and variable 2. Volume is the only factor which influence the cost 3. Constant total fixed cost 4. Constant selling price 5. Linear relationship between cost and revenues 6. No closing stock 7. Constant variable cost per unit

Differences between absorption costing and marginal costing:-

Absorption Costing:

1. It is known as full costing. Both fixed and variable are included to ascertain the cost. 2. Different unit costs are obtained at different levels of output because of fixed expenses remaining the same. 3. Difference between sales and total cost (marginal cost and fixed cost) is profit. 4. A portion of fixed cost is carried forward to the next period because closing stock of work-inprogress and finished goods are valued at the cost of production, which is inclusive of fixed cost. 5. The apportionment of fixed expenses on an arbitrary basis gives rise to over or under absorption of overheads 6. It affects managerial decisions in certain areas. E.g., whether to accept the export order or not, whether to buy or manufacture, etc. 7. Costs are classified according to functional basis such as production cost, office and administrative cost, and selling and distribution costs. 8. It fails to establish relationship of cost, volume, and profit.

Marginal Costing:

1. only variable costs are included. Fixed costs are recovered from contribution. 2. Marginal cost per unit remains same at different levels of output because variable expenses vary in the same proportion in which output varies. 3. Difference between sales and marginal cost is contribution and difference between contribution and fixed cost is profit or loss. 4. Stock of work-in-progress and finished goods are valued at marginal cost. Fixed cost of a particular period is charged to that very period and is not carried over to the next period. 5. Products are charged only with variable cost, hence marginal costing does not lead to over or under absorption of fixed overheads. 6. It is very helpful in taking managerial decisions. It considers the additional cost involved, assuming fixed expenses to remain constant. 7. Costs are classified according to the behaviour of costs  – fixed costs and variable costs. 8. CVP relationship is an integral part of marginal costing.

....................................

 ......................................