2004-05 MODEL PAPER

MCA 1.1.5

MANAGEMENT ACCOUNTANCY

First Question is Compulsory

Answer any four from the remaining

Answer all parts of any Question at one place.

Time: 3 Hrs.
Max. Marks: 100

1. Answer any THREE of the following.
a. Master file.
b. Scope for computerization of accounts.
c. Compensating errors.
d. Solvency ratios.
e. Native of costing.

2. What are the managerial uses of funds flow statement? State the limitations of ratio analysis.

3. Classify budgets with example. State the methods of preparing cash budget.

4. Discuss the practical application of marginal costing in decision making.

5. Describe the principles of accounting. State the features of subsidiary books.

6. A Practicing Chartered Accountant now spends Re. 0.90 per kilometer of taxi fares for his clients; work. He is considering two other alternatives, the purchase of a new small car or an old bigger car. The estimated cost figures are:

Items                                     New Small Old Bigger
                                                     Car             Car
				                      Rs.             Rs.
Purchase price.                               35,000       20,000
Sale price, after 5 years                   19,000       12,000
Repairs and servicing per annum          1,000         1,200
Taxes and insurance per annum           1,700           700
Petrol consumption, per litre        10 km.       7 km
Petrol price per litre                    3.50         3.50

He estimates that he does 10,000 km. Annually, which of the three alternatives will be cheaper? If his practice expands and he has to do 19,000 km. Per annum.
What would be his decision? At how many km. Per annum, will the cost of two cars break-even and why? Ignore interest and income tax.

7. Make out a cash book with discount, cash and bank columns:
June 1 Cash in hand Rs. 2,800; cash at bank Rs. 8,100.
June 3 Received from Joseph Rs. 1,500 and allowed him a discount of Rs. 20.
June 7 Paid into bank Rs. 4,000
June 8 Received for cash sales Rs. 100 and cheque Rs. 190.
June 10 Paid George by cheque Rs.570 in settlement of his account for Rs. 600
June 11 Cash purchases by cheque Rs 700
June 15 Drew for office use Rs. 350
June 17 Advertisement expenses Rs. 50
June 20 Sam paid direct into our account in the bank Rs. 620
June 22 Withdrew cash for personal use Rs. 170
June 26 Paid rent by cheque Rs. 200
June 27 Received from Raja a cheque for Rs. 490 and allowed him a discount of Rs. 10.
June 29 Received commission by cheque Rs. 220.
June 30 Cash in excess of Rs. 400 was paid into bank.

8. An inexperienced clerk of B and Co., prepared the following Trial Balance as on 31.12.1989.

       Credits              Rs.              Debits                      Rs.
Capital                  2,000       Loss in fire                       100
Loan at 10%          6,000       Building                 4,000
Creditors                  846       Furniture                          
Doubtful debts                      and Fittings                      500
reserve                    200       Plant and
Bills receivables         852       machinery                       5,800
Returns to                            Debtors                          4,800
suppliers                  500        Bills payable                       815
Carriage on                           Bank shares                        520
sales                       250       Commission
Sales                  14,954        received                             287
                                         Stock (1.1.1989)                2,818
					Cash in hand                          88
					Manufacturing expenses 782
					Wages                                 750
					Salaries                      394
					Postage and telegrams             54
					Rates                                    95
					Printing and stationary     86
					Insurance                               17
					Purchases                           2,986
					Interest on loan
					 (paid up to October 31)          450
					Returns from customers   110
					Carriage on purchases               150
		____________                                          _____________
			25,602                                                    25,602
		____________                                          _____________

Prepare the correct Trial Balance, Trading Account, Profit and Loss Account for the year ending December 31, 1989 and the Balance Sheet as on that date after taking the following adjustments into account:

a. Stock on hand 31.12.89. Goods Rs. 1,600; Stationary Rs. 45.
b. Make up the reserve for doubtful debts at 5% on debtors.
c. Depreciate Plant at 7½ % and debts at 10%
d. Outstanding expenses: Salaries Rs. 75 ; Interest on Loan.
e. Dividend due on Bank Shares. Rs. 52.
f. Insurance Co. agreed to meet the loss in fire fully.
g. Commission received in advance Rs. 25.