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D 10000 (Pages : 4) Name.........................................

Reg. No.....................................

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FIFTH SEMESTER U.G. DEGREE EXAMINATION
NOVEMBER 2021

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(CUCBCSS–UG)
B.Com.
BCM 5B 07—ACCOUNTING FOR MANAGEMENT
(2014 Admissions)
Time : Three Hours Maximum : 80 Marks
Part A
Answer all questions.

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Each question carries 1 mark.
I. Choose the correct answer from the following :
1 When current liability is paid ; current ratio ?

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(a) Increases. (b) Decreases.
(c) Does not change. (d) Becomes negative.
2 Dividend paid under AS-3 is :

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(a) Cash flow from financing activity.
(b) Cash flow from operating activity.
(c) Cash flow from investing activity.

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(d) None of these.
3 Management accounting involves :
(a) Recording transactions. .
(b) Classifying transactions.
(c) Preparation of financial statements.
(d) Analysis and interpretation of data.
4 Which among the following is a static statement ?
(a) Income Statement. (b) Balance sheet.
(c) Fund Flow Statement. (d) Cash Flow Statement.

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5 When sales are Rs. 1,00,000 and P/V Ratio is 30%, contribution is ?
(a) 70,000. (b) 30,000.
(c) 1,30,000. (d) 1,00,000.

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II. Fill in the blanks with appropriate words :
6 An increase in current liability results in notional ————— of cash.
7 Other things remain same ; BEP increases when fixed cost —————.

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8 In common size income statement ————— is taken as 100.
9 When creditors are paid in cash, the amount of working capital would —————.

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10 Debtors Turnover ratios are also called —————.
(10 × 1 = 10 marks)
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2 D 10000
Part B

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Answer any eight questions.
Each question carries 2 marks.
11 What is vertical analysis ?

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12 What do you mean by management reporting ?
13 What is CVP analysis ?
14 What are comparative financial statements ?
15 What is cash from operations ?
16 Define accounting ratio.
17 What do you mean by shut down points ?
18 Define Fund.
19 What is the significance of P/E ratio ?
20 Differentiate between net profit and fund from operation.

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(8 × 2 = 16 marks)
Part C
Answer any six questions.

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Each question carries 4 marks.
21 Explain the different tools of financial statement analysis.
22 Explain the functions of management accountant.
23 From the following data, prepare a common-size income statement :

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2010 2011
Rs. Rs.
Sales 10,50,000 16,75,000

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Return inward 50,000 75,000
Cost of goods sold 7,50,000 10,00,000
Administrative expenses 60,000 1,60,000
Selling expenses 40,000 80,000
Interest on loan 10,000 30,000
Income tax 15,000 40,000
24 From the following information calculate :
(a) BEP.
(b) Fixed cost.

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Margin of safety — Rs. 80,000 (40% of sales).
P/V ratio — 30%.
25 You are given the following data relating to a company for 2018 :

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Rs.
Net sales 20,00,000
Cost of sales (variable cost) 12,00,000
Operating expenses 3,00,000

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Interest charges 1,00,000
Tax rate 30%
Calculate :

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(a) Operating leverage.
(b) Financial leverage.
(c) Combined leverage.

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3 D 10000
26 B. M. Company presents the following information and you are required to calculate funds

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from Operation :
Profit and Loss Account
Rs. Rs.

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To expenses : By Gross profit 2,00,000
operation 1,00,000 By Gain on sale of plant 20,000
depreciation 40,000
To Loss on sale of building 10,000
To Advertisement suspense A/c 5,000
To Discount (allowed to customers) 500
To Discount on issue of shares
written-off 500

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To Goodwill 12,000
To Net profit 52,000
2,20,000 2,20,000

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27 Calculate net cash flows from investing activities from the following information :
31.12.2007 31.3.2008
Rs. Rs.

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Building (W.D.V.) 6,00,000 7,50,000
Additional information :

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(i) Building costing Rs. 1,00,000 on which Rs. 30,000 had accumulated as depreciation
was sold for Rs. 60,000.
(ii) Depreciation charged on buildings for the year ended 31.3.2008 Rs. 50,000.
28 Rani Ltd. purchases goods on cash and credit terms. From the following information, calculate
Creditors’ turnover ratio and Average payment period :
Rs.
Total purchases ... 4,20,000

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Cash purchases ... 40,000
Purchase returns ... 20,000

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Creditors at the end of the year ... 70,000
Bills payable at the end of the year ... 10,000
Provision for discount on creditors ... 3,750

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(6 × 4 = 24 marks)

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4 D 10000
Part D

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Answer any two questions.
Each question carries 15 marks.
29 From the following information, you are required to prepare a Cash Flow Statement of C.P.

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Ltd. for the year ended 31st December, 2011 using indirect method :
Balance Sheet
Liabilities 2010 2011 Assets 2010 2011
Rs. Rs. Rs. Rs.
Share capital 70,000 74,000 Cash 9,000 7,800
Debentures 12,000 6,000 Inventory 49,200 42,700
Reserve for doubtful Debtors 14,900 17,700
debts 700 800
Trade creditors 10,360 11,840 Land 20,000 30,000

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P and L A/c 10,040 10,560 Goodwill 10,000 5,000
1,03,100 1,03,200 1,03,100 1,03,200
Additional information :
(i) Dividend of Rs. 3,500 was paid.

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(ii) Land was purchased for Rs. 10,000.
(iii) Amount provided for amortization of Goodwill was Rs. 5,000.
(iv) Debentures paid of Rs. 6,000.

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30 A company had incurred fixed expenses of Rs. 4,50,000 with sales of Rs. 15,00,000 and
earned a Profit of Rs. 3,00,000 during the first half year. In the second half, it suffered a loss
of Rs. 1,50,000 Calculate :

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i. The profit volume ratio, break-even point and margin of safety for the first half year.
ii. Expected sales volume for the second half year assuming that selling price and fixed
expenses remained unchanged during the second half year.
iii. The break-even point and margin of safety for the whole year.
31 Following are the summarized balance sheets of Beta Ltd. as on 31st March 2014 and 2015.
You are required to prepare a statement of funds flow :
Liabilities 2014 2015 Assets 2014 2015
Rs. Rs. Rs. Rs.
Share capital 2,00,000 2,50,000 Land and

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Building 2,00,000 1,90,000
General reserve 50,000 60,000 Plant 1,50,000 1,74,000
P and L A/c 30,500 30,600 Stock 1,00,000 74,000
Bank loan (Short Sundry

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term) 70,000 –– Debtors 80,000 64,200

Sundry Creditors 1,50,000 1,35,200 Cash 500 600

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Provision for tax 30,000 35,000 Bank 8,000
5,30,500 5,10,800 5,30,500 5,10,800
Additional information :

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(i) Depreciation on Plant written-off Rs. 14,000 in 2015.
(ii) Dividend of Rs. 20,000 was paid in 2015.
(iii) Income tax provision made during the year was Rs. 25,000.
(iv) A piece of land has been sold during the year at cost.
(2 × 15 = 30 marks)

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