IndiaStudyCenter.com - IGNOU MBA Assignments - MS04 - Accounting and Finance For Managers

FIRST ASSIGNMENT

Course Code : MS - 04

Course Title : Accounting and Finance For Managers

Assignment Code : 04/TMA-1/SEM-I/2005

Coverage : Blocks 1, 2 and 3

Note: Attempt all questions and send it to the Coordinator of the Study Centre you are attached with.

Q.1. During the recent past what progress has been made in India regarding standardization of accounting practices in the light of on going liberalization & Globalisation?

Q.2. Prepare a statement showing applications and sources of funds during the year 2004.

Dec 31,2003 Dec 31,2004

Assets: Rs. Rs.

Fixed assets (Net) 5,10,000 6,20, 000

Investment 30,000 80,000

Current Assets 2,40,000 3,75,000

Discount on Debentures 10,000 5,000

Liabilities and Capital:

Share Capital (Equity) 3,00,000 3,50,000

Share Capital (Preference) 2,00,000 1,00,000

Debentures 1,00,000 2,00,000

Reserves 1,10,000 2,70,000

Provision for doubtful debts 10,000 15,000

Current Liabilities 70,000 1,45,000

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7,90,000 10,80,000

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You are informed that during the year:

A machine costing Rs. 70,000 book value Rs. 40,000 was disposed for Rs. 25,000;
Preference share redemption was carried out at a premium of 5%; and
Dividend @ 15% was paid on equity shares for the year 2003

Further:

The provision for depreciation stood at Rs.1,50,000 on 31.12.2003 and at

Rs.1,90,000 on 31.12.2004 and

Stock which was valued at Rs. 90,000 as on 31.12 .2003 was written upto its cost

Rs. 1,00,000 for preparing the profit and loss account for 2004.

Q.3. You are required to prepare the Income statement on marginal costing basis from the information provided by XYZ Ltd. for the year ending 31 st March 2005 you are also required to calculated the following:-

Profit Volume Ratio (P/V Ratio)
Break-Even Point (in unit, Rs & %)
Margin of Safety (in units, Rs & %)

From the given information

Normal capacity - 2000 units

Production & Sales - 2000 units

Selling Price per unit - Rs.10

Direct Material - Rs.2,000

Direct Wages - Rs.2,000

Direct Expenses - Rs.1,600

Factory Overheads (15% variable) Rs.4,000

Office & Admn. Expenses (80% fixed) Rs.4,000

Selling and Distribution Expenses (75% fixed) Rs.4,000

SECOND ASSIGNMENT

Course Code : MS - 04

Course Title : Accounting and Finance For Managers

Assignment Code : 04/TMA-2/SEM-I/2005

Coverage : Blocks 4 and 5

Note: Attempt all questions and send it to the Coordinator of the Study Centre you are attached with.

Q.1. Kongo & Sons is considering two mutually exclusive projects. Both need a initial cash outlay of Rs.10,000 each, and have a life of five years. Company’s required rate of return is 10 percent and pays tax at a 50 per cent rate. The projects are gong to be depreciated on a straight line basis. The before taxes cash flows expected to be generated by the projects are as follows:

___________________________________________________________

Year

_________________________________

1 2 3 4 5

____________________________________________________________

Project P (Rs.) 4,000 4,000 4,000 4,000 4,000

Project Q (Rs.) 6,000 3,000 2,000 5,000 5,000

____________________________________________________________

Calculate for each project: 1) the payback (2) the average rate of return (3) the net present value and profitability index, and (4) the internal rate of return. Which project should be accepted and why?

Q. 2. You are required to prepare a cash budget for Ruchi Ltd on the basis of the information given below:

1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter

Opening cash balance 10,000

Collection from customers 1,25,000 1,50,000 1,60,000 2,21,000

Payment:

Purchase of materials 20,000 35,000 35,000 54,200

Other expenses 25,000 20,000 20,000 17,000

Salary and Wages 90,000 95,000 95,000 1,09,200

Income Tax 5,000 --- --- ---

Purchase of machinery --- --- --- 20,000

The company desires to maintain a cash balance of Rs, 15,000 at the end of each quarter. Cash can be borrowed or repaid in multiples of Rs.500 at an interest of 10% per annum. Management does not want to borrow cash more than what is necessary and wants to repay as early as possible. In any event, loans cannot be extended beyond four quarters. Interest is computed and paid when repayment is made at the end of the quarter.

Q.3 . a) Describe the characteristics of a flexible budget?

b) “For Private sector’ budgets are important in profit planning, but budgets are costly for not - for – Profit organisations” Respond.

THIRD ASSIGNMENT

Course Code : MS-04

Course Title : Accounting and Finance For Managers

Assignment Code : 04/TMA-3/SEM -I/2005

Coverage : All Blocks

Note: Attempt all the questions and send it to the Coordinator of the Study Centre you are attached with.

Q.1. Explain the different methods of inventory valuation with the help of suitable examples.

Q.2. Rearrange the given statement in a form suitable for analysis and calculate:-

Ratio of current assets to current liabilities
Ratio of outside liabilities to net worth
Ratio of net worth to fixed assets
Ratio of sales to fixed assets
Ratio of sales to net worth
Liquid ratio
Fixed assets ratio
Proprietary ratio
Capital turnover
Debtors Turnover ratio

Condensed Balance Sheet

2003 2004

Rs. Rs.

Assets:

Cash at Bank 1,53,800 2,60,200

Trade debtors 1,12,600 1,17,100

Stock 5,61,600 4,94,600

Fixed Assets less:- Depreciation 21,72,000 21,98,100

---------------- ----------------

30,00,000 30,70,000

Liabilities and Capital

Creditors 2,00,000 1,60,000

Bills payable 1,27,500 65,000

Debentures 10,00,000 10,00,000

Reserve and surplus 6,72,500 8,45,000

Paid up capital 10,00,000 10,00,000

----------------- -----------------

30,00,000 30,70,000

Sales 18,00,000 19,50,000

Q.3 You are required to prepare the company’s Balance Sheet as on 31 st December 2004, and its Profit and Loss Account for the year ended on that date from the information provided and also making necessary assumptions wherever required. The under mentioned balances appeared in the books of Dingo Flour Mills Ltd, as on 31 st December 2004:-

Rs. Rs.

Share Capital (Authorised Motor Vehicles 15,000

and Issued), 60,000 Shares Furniture 5,000

of Rs. 10 each 6,00,000 Stocks 1,72,058

General Reserve 2,50,000 Book Debts 2,23,380

Unclaimed Dividends 6,526 Investments 2,88,950

Trade Creditors 36,858 Depreciation Reserve 71,000

Buildings 1,00,000 Cash Balances 72,240

Purchases 5,00,903 Director’s Fees 1,800

Sales 9,83,947 Interim Dividend 15,000

Manufacturing Expenses 3,59,000 Interest 8,544

Establishment 26,814 Profit and Loss Account

General Charges 31,078 1 st January 2004(Cr) 16,848

Machinery 2,00,000 Staff Provident Fund 37,500

Additional Information:-

The stock of wheat and flour on 31st December 2004, were valued at Rs. 1,48,680.
Provide Rs.10,000 for Depreciation of block, and Rs. 1,500 for the company’s contribution to the Staff Provident Fund
Interest accrued on investment amounted to Rs. 2,750.
A claim of Rs. 2,500 for workmen’s compensation is being disputed by the company.
Establishment includes Rs. 6,000 paid to the Manager who is entitled to remuneration @ 5% of profit ascertained according to the companies Act, subject to a minimum of Rs. 10,000 p.a.