WBUT Question Papers Financial Management And Account B Tech 7th Sem Dec 2008

      WBUT Question Papers

Financial Management And Account B Tech 7th Sem Dec 2008

 Time: 3 Hours 1

Full Marks : 70

GROUP – A ( Multiple Choice Type Questions)

  1. Choose the correct alternatives for any ten of the following :

1) Agreement of Trial Balance ensures

a)                 the arithmetical accuracy of recording transactions

b)              the arithmetical accuracy of Ledger posting

c)               the arithmetical accuracy of all accounting records

d)              none of these.

ii) Working Capital means

a)              Current Assets ( -) Non-current Liabilities

b)              Non-current Assets (-) Current Liabilities

c)               Current Assets (-) Current Liabilities

d)              None of these.

ill) Which of the following is not a Debt Capital ?

a) Debenture

b) Loan from a Financial Institution

c) Preference Share Capital d) Long Term Loan.

iv)            The Break-even point is a point at which the firm makes a) zero profit b) super profit c) normal profit d) none of these.

v)              Margin of Safety means a) BEP sales ( – ) Actual sales b) Budgeted sales ( – ) BEP sales

c) Actual sales ( – ) BEP sales d) None of these.

vi)             When office furniture is sold on credit the entiy should be passed in

a) Sales Day Book   b) Journal Proper

c) Cash Book              d) None of these.

vli) The debit balance of the Profit & Loss A/c Indicates

a) Gross Loss                      b) Net Profit

‘ c) Net Loss                 d) None of these.

viii)        The fixed assets are held in the business for the purpose of

a)             re-sale  b) security of business

c) earning revenue        d) none of these.

ix)            Credit may signify

a)      decrease in assets b) increase in incomes

c)      both (a) and (b) d) none of these.

x)               The proprietor is treated as a creditor to the extent of his capital according to

a} Going Concern Concept  b) Entity Concept

c)              Money Measurement Concept d) Dual Aspect Concept.

xi)             According to the modern Rules of Accounting, the Accounting Heads are classified as

a)              Personal Account. Real Account and Nominal Account

b)              Current Account and Non-current Account

c)              Assets, Liabilities, Incomes and Expenses

d)              None of these.

xii)          Working Capital is not affected by the transaction between

a)              Current Assets and Non-current Assets

b)              Current Liabilities and Non-current Liabilities

c)               Non-current Liabilities and Current Assets

d)              Current Liabilities and Current Assets.

xiii)         Provision for Doubtful Debts Account is a

a)               Real A/c                  b) Nominal A/c

c)               Valuation A/c d) Personal A/c.

A                                                                                                                             –

GROUP -B ( Short Answer Type Questions)

Answer any three of the following.     3×5 = 15

  1. A project requiring an investment of Rs. 10,00,000 yields profit after tax and depreciation as follows :

Yean                                                       Profit after tax and depreciation ( Rs.)

1                       50,000

2                        75,000

3                       1,25,000

4                       1,30,000

5                         80,000

Total 4,60,000

At the end of 5 years, the plant and machinery of the project can be sold for Rs. 80,000. Calculate the rate of return under Average Rate of Return method (ARR).5

  1. What is Pay back period ?

A project costs Rs. 20,00,000 an<Tyields annually a profit of Rs. 3,00,000 after depreciation @ 12.5% ( Straight line method ) but before tax 50%. Calculate the cash Inflow from the project and Pay-back period.                                             2 + 3

  1. Journalise the following transactions :

a)               Purchased 15 pcs. Furniture ® Rs. 1,000/- each by cash for the following purposes :

—    10 for reselling

—      3 for office use

—      2 for personal use.

b)               Goods of Rs. 3,000/- were destroyed by fire and an insurance claim of Rs. 2,500/- Is realizable against it.                  5

77101 (4/12)

  1. a) A company raises Rs. 1,00,000 by the Issue of 1,000, 10% Debentures of

Rs. 100 each repayable at par after 10 years. If the rate of Company’s tax Is 50%, what Is the cost of Debt capital to the firm ?

b)              X Ltd. Issues 1,000, 10% Preference Shares of Rs. 100 each at Rs. 95 each redeemable at the end of the 10th year from the year of issue. What is the cost of Preference Share capital to the firm ?                                                     2 + 3

GROUP – C (Long Answer Type Questions)

Answer any three questions.

  1. Write short notes on any three of the following :

a)              Working Capital

b)              Acid Test ratio

c)              Journal Proper

d)              Economic order quantity

e)              Maximum stock

f)                Minimum stock –

gj  Golden rules in double entry book keeping.

  1. A Company proposing to expand Its production can go in either for an automatic machine costing Rs. 2,24,000 with an estimated life of 5 ^ years or an ordinary

machine costing Rs. 60,000 having an estimated life of 8 years.     *

The annual sales and costs are estimated as follows :

Automatic machine  Ordinary machine

Sales             Rs. 1,50,000       Rs. 1,50,000

Material            Rs. 50,000         Rs. 50,000

Labour              Rs. 12,000         Rs. 60,000

Variable OH         Rs. 24,000         Rs. 20,000

Compute the comparative profitability of the proposals under the pay back method.

  1. Define the ratio as under and compute them from the following balance of Y Limited as on 31. 03. 2008 :

 

a)

b)

c)

a)                                e)

Current ratio Debt-Equity ratio Liquid ratio Capital Gearing ratio Debt ratio.

 

 

 

 

Rs. (in lacs )

Rs.

(in lacs)

Equity Share Capital

5.00

Fixed Assets

10.00

Preference Share Capital

2.50

Stock-in-trade

1.50

Reserve & Surplus

2.00

Book Debt

3.00

Debenture

2.00

Investment ( short term)

2.50

Bank OD

1.00

Prepaid Expenses

0.50

Sundry Creditors

5.00

   
Outstanding Expenses

0.50

Cash

0.50

 

18.00

 

18.00

Following Information in respect of Product A and Product B of X Co Ltd. is as under :

Product A               Product B

Selling Price           Rs. 150.00 Rs. 65.00

. Direct material             Rs. 50.00 Rs. 50.00

Direct Labour hour ( Rs. 0.50/hr ) 20 hrs.          4 hrs.    v

Variable overhead = 100% of Direct wages. Present the above information to show the profitability of the Products during labour shortage.

a)               Define Break-even point and Margin of Safety.

b)              The followng data Eire obtained from the records of a factory :

Sales 2000 units @ Rs. 100

Materials consumed      Rs. 50,000

Labour Charges            Rs. 30,000

Variable OH               Rs. 10,000

Fixed Cost                Rs. 55,000

Find out the Break-even point and Margin of safety.     *

 

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