Seat No.: ________ Enrolment No.

___________

GUJARAT TECHNOLOGICAL UNIVERSITY

MBA – SEMESTER 1– EXAMINATION – SUMMER 2019

Subject Code:2810001 Date:14/05/2019

Subject Name: Accounting for Managers
Time:02:30 PM 05:30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q1. (a) Identify the letter of the choice that best completes the statement or answers the 6
question
1. A person who supplies goods to the firm is known as
A A Debtor B A Creditor
C Proprietor D None of these
2. Investment is taken as
A Current Assets B Fixed Assets
C None of these D Both A and B
3. The animals used in the business is known as
A Current Assets B Dead-stock
C Livestock D Fictitious Assets
4. Insolvent means
A Assets=Liabilities B Assets>Liabilities
C Assets and Liabilities=0 D Assets<Liabilities
5. The amount which is irrecoverable from debtor is known as
A Doubtful Debt B Bad Debts
C Good Debt D None of these
6. An entrepreneur withdrawing goods or money for personal use is known as
A Capital B Expense
C Withdrawals D Drawings
Q1. (b) Explain the following terms: 4
1. Dead-stock
2. Intangible Asset
3. Authorized Share Capital
4. Preliminary Expenses
Q1. (c) 100 shares of Rs.500 each are purchased by Mr.X after paying brokerage of 2% and 4
Investment Advisor’s Fees of Rs.500. Find out the cost of investment.
Q2. (a) Write a short-note on Trend Analysis. Support it with imaginary figures. 7
Q2. (b) From the following data, identify the value of the closing stock and Cost of Goods 7
Sold under LIFO, FIFO and WAM as per periodic inventory system. Comment on
the value of the closing stock.
July 1 Inventory 100 units at Rs.8
July 8 Sale 90 units
July 15 Purchase 125 units at Rs.12
25 Sale 60 units
OR
Q2. (b) Write a short-note on AS-9 Recognition of Income. 7
Q3. (a) How is Accounting useful to different type of users? Elaborate the statement. 7
Q3. (b) Journalize the following the transactions: 7
1. Started business with cash Rs.1,00,000.

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 2. Bought goods from Mr. Ram for Rs.80,000, 50% paid in cash.
3. Sold goods of Rs.25,000 to Ms.Rekha at 35% profit on Sales price.
4. Paid salary Rs.30,000 to Ms.Dipika.
5. Paid Rs.30,000 in full settlement to Ms. Tina towards her dues of
Rs.30,105.
6. Rent of Rs.3,000 is due but not received.
7. Paid Rs.1,001 in the wedding ceremony of maternal uncle’s son.
OR
Q3. (a) Write a short-note on Accounting Standard with reference to various levels of 7
categories of enterprises.
Q3. (b) Interpret the following ratios in the best possible manner. Both the companies are in 7
the same industry.
Type of Ratio Lincoln Company Abraham Company
Current Ratio 2.6:1 2.2:1
Quick Ratio 2.6:1 2.6:1
Debtors Turnover 12.7 times 9.2 times
Average Collection 29 days 40days
Period
Inventory Turnover 3.8 times 2.8 times
Interest Coverage Ratio 28.1 times 12.2 times
Rate earned on total 8.2% 7.3%
assets
Q4. (a) What is Generally Accepted Accounting Principles? Explain any four principles of 7
your choice with appropriate example.
Q4. (b) On 1st January, 2010 M/s. Joseph Limited purchased machinery for Rs.12,000 and 7
on 30th June, 2011, it acquired additional machinery at a cost of Rs.2,000. On 31st
March, 2012 one of the original machines which cost Rs.2,000 was found to have
become obsolete and was sold as scrap for Rs.500, it was replaced on the same day
by a new machine costing Rs.800. Depreciation is to be provided at the rate of 15%
per annum on the Written Down Value Method. Show machinery account for three
years. The year end to be followed is 31st December.
OR
Q4. (a) Differentiate between Provision and Reserves. 7
(b) Write a short-note on DuPont Model.
Q5. (a) From the following trial balance of Ram Gopal and Sons as on 31st March, 2012, 7
prepare trading and profit and loss account for the year ending 31st March, 2012 and
balance sheet as on that date:
Particulars Debit (Rs.) Credit (Rs.)
Capital - 3,50,000
Drawings 25,000 -
Plant and Machinery 1,50,000 -
Debtors and Creditors 90,000 40,000
Returns 10,000 12,000
Discount 5,000 4,000
Commission 8,000 -
Interest on bank loan 22,000 -
Furniture 34,000 -
Provision for Doubtful debts - 12,000
Wages 48,000 -
Salaries 60,000 -
Advertisements 15,000 -
Taxes and Insurance 12,000 -
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 Purchases and Sales 2,40,000 4,80,000
Stock (as on 31.03.2011) 50,000 -
Carriage 12,000 -
Land and Buildings 3,00,000 -
Cash in Hand 12,000 -
Cash at Bank 25,000 -
10% Bank Loan (as on 01.4.2011) - 2,20,000
Total 11,18,000 11,18,000
Adjustments:
1. Stock was valued at rs.46,000 as on 31st March, 2012.
2. Wages and salaries were outstanding Rs.5,000 and Rs.4,000 respectively on
31st March, 2012.
3. Depreciate Plant and Machinery, land and buildings and furniture at 15%,
2.5% and 15% respectively.
4. Provide for doubtful debts at 10% on debtors.
(b) Draw the Performa of Vertical Balance-Sheet with imaginary numbers.
OR
Q5. (a) The accompanying balance-sheet relates to Hypothetical Ltd. Convert these into 7
Common-Size Statements and interpret the same. (Amount is in lakh of rupees).
Liabilities 2015 2016 Assets 2015 2016
Equity Share 240.0 240.0 Plant (net) 402 390
Capital (Rs.10
each)
General Reserves 96.0 182.0 Cash 54 78
Long Term 182.0 169.5 Debtors 60 65
Loans
Creditors 67.0 52.0 Inventories 84 117
Outstanding 6.0 -
Expenses
Other Current 9.0 6.5
Liabilities
Total 600 650 Total 600 650
(b) Write a short-note on Fund Flow Analysis. 7

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