Compare And Contrast The Socio Political Climate In China Accounting Essay

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Compare and contrast the socio-political climate in China under Mao Zedong and Deng Xiaoping. Who in your view exerted greater influence on Chinese economy and society and why?

Discuss the importance of guanxi (network of relationships) and mianzi (dignity) in the context of doing business in China. What are the cultural antecedents of these phenomena? Similar question can be asked on any of the Hofestede's dimension for any country.

How does wa - the spirit of harmony - affect business practices in Japan? Does wa boost or hinder productivity and managerial effectiveness? Explain with relevant examples.

Do Western companies planning to expand their operations in Asia have to necessarily adapt their products and processes to the Asian context? Illustrate with examples of companies that adapted themselves to the region and those that didn't.

Consider a particular cultural activity that is important to you (for example, Food Habits; Rituals and Religions. How this is different from cultures in Middle East and south East Asia?

HOFSTEDE MODEL

Explain Hofstede's model with relevant examples.

Which of the Hofstede dimensions do you consider to be most relevant to study of culture in the business context? Explain your choice?

What are the advantages and limitations when using Hofstede dimensions to describe organizational cultures?

Elaborate on the Geert Hofstede's theory on culture.

Profile the cultures of any 2 countries on Hofstede's cultural dimensions. How similar or dissimilar are these cultures to each other?

CULTURE

Can a corporate Culture be managed? If so what can be done for it to be managed. If not, explain why.

What do structure and culture have in common?

What are clusters of cultures?

How do organizations with employees from diverse culture manage to build a holistic environment.

What has been Korean influence on our industry?

Business Environment

"A Bangladeshi rock band finds that a 'Bollywood' movie producer has pirated one of its songs; band members were astonished. An exporter of traditional herbal medicines from Nepal runs into regulatory barriers he cannot understand nor do much? An 'inside' account of how India struggled to develop a national consensus on the liberalization of its protected agriculture sector. As a WTO Consultant, under the framework of WTO what actions would you suggest to the above mentioned situations?

Tata Motors has been aiming at the states of West Bengal/UP/Uttranchal to locate its new plant for the manufacture of its mini care(1 lakh car). Comment on what is the basis of the company's choice for the location. Also give your views on how the product may fare with respect to its competition. Has the major competitor reacted?

What is globalization? Explain the features of globalization.

What is monetary policy? Discuss its objectives and importance.

What is World Trade Organization and what is its role in today's business environment?

What do you understand by Business Ethics? Are ethics necessary in the present context?

FEMA: A major departure from FERA

"To keep pace with growth and development of an economic system, regulations on foreign investment must be relaxed and more openness be their in the system". Explain in the context of a developing country like India.

Write short notes on following:

SSI

Public Sector

Planning Commission of India

PESTEL

SEZ

WTO

EXIM policy

Differentiate between FDI and FII

FEMA

CSR

Privatization

Inflation

Black Marketing

Hoarding

Critically analyze the impact of liberalization on the Indian economy.

Analyze the failure of economic planning in India. Suggest various measures for the success in economic planning?

"Business Environment is dynamic". Critically analyze this statement in view of how the companies in India have been able to adapt to the same in emerging retail sector.

Managerial Economics

Domestic demand for a good is: Qd = 3000 - 25P, the domestic supply of the good is:

Qs = 20P, and foreign producers can supply any quantity at a price (P) of $30.

What is the domestic equilibrium price and quantity?

At this domestic equilibrium price, how much of the good will be supplied by domestic producers and how much by foreign producers?

The demand equation for the Widget Company has been estimated to be:

Qd = 20,000 + 10 I - 50P + 20 PC

where Q = monthly number of widgets sold, I = average monthly income, P = price of widgets, and PC = average price of competing goods.

If next month's income is forecast to be 2,000, the price of competing goods is forecast to be $20, and the price of widgets will be set at $30, forecast sales.

What will sales be if the price is dropped to $20?

The following table shows the relationship between output and number of workers in the

short run. If the wage is $50/day, find marginal cost of production.

Number Of Workers

Output

0

0

1

50

2

110

3

300

4

450

5

590

6

665

7

700

8

725

9

710

10

705

4. The table below shows the weekly relationship between output and number of workers for a

factory with a fixed size of plant.

Number Of Workers

Output

0

0

1

50

2

110

3

300

4

450

5

590

6

665

7

700

8

725

9

710

10

705

a. Calculate the marginal product of labor.

b. At what point does diminishing returns set in?

c. Calculate the average product of labor.

d. Find the three stages of production.

e. Based on the table above, if the wage rate is $500 and the price of output is $5, how many workers should the firm hire?

Q5. The following matrix shows the payoffs for an advertising game between Coke and Pepsi. The

firms can choose to advertise or to not advertise. Numbers in the matrix represent profits; the

first number in each cell is the payoff to Coke. (Numbers in millions.)

Coke (rows)/Pepsi (columns)

Advertise

Don't Advertise

Advertise

(10, 10)

(500, -50)

Don't Advertise

(-50, 500)

(100, 100)

a. Explain why this would be described as a Prisoner's Dilemma game.

b. Explain the probable outcome of this game.

Q6. Consider a firm that has just built a plant, which cost $20,000. Each worker costs $5.00 per hour. Based on this information, fill in the table below.

Number of

Worker Hours

Output

Marginal Product

Fixed

Cost

Variable

Cost

Total

Cost

Marginal

Cost

Average

Variable

Cost

Average

Total

Cost

0

0

--

20,000

--

--

--

50

400

20,250

100

900

20,500

150

1300

20,750

200

1600

21,000

250

1800

21,250

300

1900

21,500

350

1950

21,750

Q7. The following table gives the information regarding the units produced, TR and TC of production of a North Indian Tools factory. Complete the table: (25 Marks)

Total Profit

Marginal Profit

Unit of Output

Total Revenue (Rs.)

Marginal Revenue

Total Cost (Rs.)

Marginal Cost

 

 

250

1000

 

752

 

 

 

251

1004

 

753

 

 

 

252

1008

 

755

 

 

 

253

1012

 

758

 

 

 

254

1016

 

762

 

 

 

255

1020

 

767

 

 

 

256

1024

 

773

 

 

 

257

1028

 

780

 

(i)Determine the profit maximizing output level.

(ii) Is profit maximum at the output where marginal profit equals zero? Is this always the case or is this unique to this particular problem?

(iii) Is profit maximum where total revenue equals total cost? Explain.

Q8. The short run production function of a hosiery is:

Qx = 12L + 6L2 - 0.1L3

Where Qx = daily out of hosiery

L = the number of workers employed

How many workers are employed when the average product of banians is maximized?

How many workers are employed when the marginal output of banians is maximized?

If the daily wage rate is Rs.30 and the selling price of banian is Rs.40 per piece, how many banains should be produced to maximize profits in this business?

Q9. The Times of India is one of the leading newspapers in India. In September 2006, it lowered its price from 45 paise to 30 paise while prices of its rivals remained unchanged. The number of newspapers sold by TOI and its rivals was as follows:

 

August

2006

May

2007

TOI

3,55,000

5,18,000

Statesman

10,24,000

9,93,000

Hindu

3,92,000

4,02,000

Hindustan Times

3,25,000

2,77,000

Based on the figures, find the price elasticity of demand for TOI.

Was the cross elasticity of demand between Statesman and TOI positive or negative?

Would you expect it to be positive or negative? Why?

Q10. Two executives of A.P. State Transport Corporation, Mr. Ramana and Mr. Krishna, submitted the following estimates of passenger traffic at various fares on a certain route in the state.

Fares

(paise per mile)

Average number of mile rides to be sold daily

Mr. Ramana's estimate

Mr. Krishan's estimate

10

200

150

9

220

180

8

230

240

7

250

300

6

280

400

5

300

600

4

350

800

Calculate the total revenue and the marginal revenue and show whether demand is elastic or inelastic on the basis of each set of estimates.

You are working with marketing division of a mobile company. How would you use your knowledge of demand and supply in determining an appropriate marketing strategy for your company?

You are working for Coca Cola as marketing head. The company is planning to float a new soft drink which is white in colour. What lessons from the concept of elasticity can you draw while fixing the price for this new drink?

Choice reveals preference!' Do you agree with this statement? Illustrate your arguments with help of an example and suitable diagrams.

"There are many difficulties in measuring national income. Yet no country can afford not to measure national income." Discuss.

Andhra Pradesh State Electricity Board (APSEB) charges different rates for electricity consumed by different categories of users:agriculture, households and corporate sectors. Attempt an economic analysis commenting on the possibility, profitability and desirability of such a practice.

Briefly list and elaborate on the factors that will be affecting the supply for the following products in the next several years. Do you think these factors will cause the supply to increase or decrease?

Crude oil

Laptop computers

Computer memory chips

Hotel rooms

Fast food outlets in emerging markets

How is a monopolistically competitive industry like perfect competition? How is it like monopoly?

In game theory analysis, what is a "dominant strategy"?

Difference between substitute and complementary goods with examples.

Difference between short run and long run cost of production.

What do you mean by Price discrimination?

What do you mean by Break-even point?

Explain Monopoly market with example.

One of the basic features of a perfectly competitive market is perfect information. What if this assumption is relaxed?

Is it always useful for a seller to lower the price in order to increase sales volume? Comment.

Which, among the three degrees of price discrimination, seems to be the most unrealistic to you? Support your answer with reasons

If there were no legal entry barriers would there be a competitor to Indian Railway?

Give any three examples of monopolistic firms with suitable reasons.

What do you mean by monopoly? Give some features of monopoly competitive market. Discuss the short run and long run situations for a monopolist with suitable diagrams.

To what extent does the kinked demand curve help in explaining price rigidity under oligopoly?

Answer briefly:

Cost based pricing

Micro and macro economics.

Explain any two properties of indifference curve.

Price discrimination.

Homogeneous and heterogeneous products.

If the demand is fixed but supply of a product increase, what happens to equilibrium price and quantity? Explain with the help of diagram.

Relevance of the distinction to cost analysis with context of short run and long run.

As a consumer, would you favour advertising in a competitive industry?

Why AR and MR equal in Perfect competition?

Explain any two internal economies of scale.

What is price elasticity of demand? Explain various degrees of price elasticity of demand with help of diagrams and examples.

A budget line is nothing but demand curve of the consumer expressed in terms of two goods given the money income and price of these two commodities. Explain with help of table and diagram.

Why are both industry and firm demand curves downward sloping in monopoly markets?

Describe oligopoly market structure and give some examples.

Briefly list and elaborate on the factors that will be affecting the demand for the following products in the next several years. Do you think these factors will cause the demand to increase or decrease?

Convenience foods ( sold in food shops and supermarkets)

Products purchased on the internet

Fax machines

Film and cameras

Videos rented from retail outlets

Marketing Management

Discuss the scope and relevance of the concept of market segmentation. Will the scope change with the opening of Indian economy? Illustrate how firms would be benefited in marketing their products and services by segmentation.

Briefly discuss the concept of positioning. What could be the positioning of

Airtel

Kingfisher Airlines

Thums Up

Kent Water Purifier

Discuss in brief the various pricing strategies used by marketers. Suggest suitable pricing strategy for

Software

100 cc motorcycle

Luxury car

Laptop

How is a product specialization different from market specialization? Discuss using atleast 2 examples.

Using an example, discuss the marketing strategies that may be used at the introductory and maturity stages of the product life cycle.

a) Discuss the main objectives of sales promotion. Explain some of the sales promotion methods directed at consumers, which can be used by a detergent manufacturer.

Discuss the role of personal selling and advertising in promotional industrial products. How does it compare to consumer product promotion?

Write short notes on

STP strategies

Functions of Packaging

Elements of promotion mix

Methods of sales forecasting

Market Intelligence

Product Mix

Service Marketing

Marketing Strategies in the decline stage of PLC

Distribution channel for a legal consultancy

Promoting Pulse polio immunization

Digital marketing for an online Bank

Gorilla marketing tactics with support of examples.

Pursuing Green Marketing with support of examples

Introducing tangibility to services

Packaging as a pull strategy

Price Adjusting Strategy for a premiere women apparel brand

Explain the basic concept of marketing? What is the difference between needs, wants and demand? Explain through examples.

What are the important components of a marketing plan. Why is it necessary for organizations to develop a solid marketing strategy before designing the marketing plan. Explain through an example?

What are the important features of business markets? How do business markets differ from consumer markets? How will an organization market its products through inter market segmentation?

What is a product? How is a product different from service? Can a service industry organization develop a strong range of products? Explain through an example of hotel industry?

What is the importance of channels of distribution in the successful marketing of products and brands. What factors will determine the channel length in marketing of biscuits in both rural and urban markets. Give Reasons.

What are the various ways in which marketing information can be collected. Explain the difference between market research, information collected from internal database / transaction and market intelligence.

What are consumer markets? Why is it important to understand consumer behaviour in measuring the size of consumer markets? Are computers consumer products or industrial products. Explain.

What is the role of a brand in the success of its marketing strategy? Explain how Godrej has used brand extension strategy to successfully launch its diversification drives?

Explain the importance of pricing in the overall marketing strategy of an organization? What pricing strategy was used by Maruti Suzuki to successfully market Swift and why?

What are the different levels of market segmentation?

Several consumer electronics companies have reaped substantial benefits from market-skimming pricing. Discuss the pros and cons of this pricing strategy, citing relevant examples. When is market-skimming most appropriate?

Describe the following types of segmentation with the help of four examples each:

a. Psychographic segmentation

b. Behavioral segmentation

How do reference groups affect an individual's buying behavior? Illustrate with four examples of product categories where reference groups have the greatest influence.

What kind of distribution channel would you recommend for the following products and why?

Personal computers ii) Industrial lubricant

Consumers buy brands not products. Discuss the importance of branding in the light of the above statement with suitable examples of your choice.

"Marketing research is the key to the success of a company." Discuss the above statement, keeping in view that you have launched a 4 star hostel facility in your city. Elaborate how the exercise of marketing research has helped you in formulating the right marketing strategy.

Accounting for Managers

Elaborate the concept, and definition of Accounting. Explain the meaning of book keeping and its objectives. Explain the limitations of Accounting.

Discuss the accounting concepts, conventions and postulates. Explain the various branches of accounting and their role, importance and application in business. Explain the various terms used in the accounting process.

Elaborate the concept of financial statement analysis. Explain the various types of Ratio Analysis and their use in analyzing financial statements.

Discuss the concept of double entry system. Elaborate the advantages and disadvantages of double entry system

Elaborate the concept of accounting standards and their role in accounting.

Discuss the various types of accounts, accounting rules and process of recording classifying and summarizing transactions.

What is a trial balance? Elaborate the process of preparation of trial balance. What are the mistakes discovered by the trial balance.

What is a ledger? How is the ledger balancing done? Differentiate between a journal and a ledger.

Elaborate the proforma of balance sheet in horizontal / vertical format according to the requirements of schedule VI of the companies act 1956.

Discuss the concept and application of Depreciation. Explain the various types of depreciation methods and the process of application of depreciation concept.

Explain the concept of Balanced Score Card and its principle & uses in business.

Explain the concept and types of budgets including master budget. Discuss the budgeting process and explain about the limiting or the key factor.

Explain the concept of discounted and non discounted cash flow techniques of capital budgeting. Elaborate the concept of capital budgeting and its role in planning.

Elaborate the concept of Inventory valuation and inventory control. What are the applications of the concept of inventory valuation and inventory control. -ratio analysis FM

Elaborate the concept of cost, cost drivers and cost behavior. Elaborate the various types of costs.

Explain the concept and importance of capital budgeting.

Elaborate the various techniques of evaluating projects in capital budgeting.

Discuss the concept, types and importance of variance analysis. Elaborate the various individual components of the various variances of material, labour and overheads.

Short Notes on

Tangible Asset

Ratio Analysis

Creditors

Profit after tax

Depreciation

Activity Cost Accounting

Master Budget

Bills Payable

Trial Balance

MCS

Distinguish between cost allocation and cost absorption

What is meant by "Profit centre"?

Specify the methods of costing and cost units applicable to the following industries Toy making (ii) Cement (iii) Radio (iv) Bicycle (v) ship building

Practical Questions

Q1. JB ltd. has the following profit and loss account for the year ended 31st March 2010 and the balance sheet as on that date

Profit and Loss Account (for the year ended 31st March, 2010)

 

 

 

Rs. (In Lakhs)

Particulars

Rs.

 

 

Opening Stock

1.75

Sales: Credit

12

Add: Manufacture Cost

10.75

Cash

3

 

12.5

 

 

Less:

1.5

 

15

Cost of Goods Sold

11

Gross Profit

4

Gross Profit

4

Other Income

0.09

 

15

 

4.09

Administrative Expenses

0.35

 

 

Selling Expenses

0.25

 

 

Depreciation

0.5

 

 

Interest

0.47

 

 

Balance Sheet (as on 31st March, 2010)

Equity shares of Rs. 10 each

3.5

Plant and Machinery

10

10% preferential shares

2

Less: Depreciation

2.5

Reserves and surplus

2

Net Plant and Machinery

7.5

Long term loan (12%)

1

Goodwill

1.4

Debentures(14%)

2.5

Stock

1.5

Creditors

0.6

Debtors

1

Bills Payable

0.2

Prepaid Expenses

0.25

Accrued Expenses

0.2

Marketable Securities

0.75

Provision for Tax

0.65

Cash

0.25

 

12.65

 

12.65

The market price of the share of JB Ltd. On 31st March, 1998 is Rs. 45.

Reserves at the beginning

1.465

Net Profit during the year

1.26

Preference Dividends

2.725

Equity Dividends

0.2

Reserves at the close of year

0.525

Calculate the various types of ratios (Any 5)

1) Current Ratio 2) Quick Ratio 3) Debt-Equity Ratio 4) Interest coverage Ratio

5) Fixed charge coverage Ration 6) Stock Turnover Ratio 7) Debtors Turnover Ratio 8) Average Collection Period 9) Gross Profit Ratio 10) Net Profit Ration 11) Operating Ration 12) Return on Capital Employed 13) Return on Shareholders' Equity 14) Earnings per Share 15) P /E Ratio

Q4. The following is Trial Balance of Mrs. S Kapur on 31st Dec. 2008

Balance

Rs.

Balance

Rs.

Cash in Hand

1080

Capital (Cr.)

142000

Cash in Bank

5260

Sales A/C (Cr)

197560

Purchases

81350

Returns outward

1000

Returns Inward

1360

Creditors

12600

Wages

20960

Carriage on Sales

6400

Fuel and Power

9460

Stock (1-1-08)

11520

Carriage on Purchase

4080

Freehold Land

20000

Building

60000

Salaries

30000

Machinery

40000

General Expenses

6000

Patents

15000

Drawings

10490

Insurance

1200

Debtors

29000

Taking into account the following adjustments, prepare Trading and P/L Account and Balance Sheet.

Stock in hand on 31st December is Rs. 13,600.

Machinery is to be depreciated at the rate of 10% and patents at the rate 20%.

Salaries due for the month of Dec. 2008 amounting Rs. 3000 were unpaid.

Insurance include a premium of Rs. 170 for 2009.

Wage include a sum of Rs. 4000 spent on the erection of a scooter shed for employees and customers.

A provision for bad and doubtful debts is to be created to the extent of 5% on Sundry Debtors.

Q5. The following is Trial Balance of Mrs. S Kapur on 31st Dec. 2008

Balance

Rs.

Balance

Rs.

Cash in Hand

1080

Capital (Cr.)

142000

Cash in Bank

5260

Sales A/C (Cr)

197560

Purchases

81350

Returns outward

1000

Returns Inward

1360

Creditors

12600

Wages

20960

Carriage on Sales

6400

Fuel and Power

9460

Stock (1-1-08)

11520

Carriage on Purchase

4080

Freehold Land

20000

Building

60000

Salaries

30000

Machinery

40000

General Expenses

6000

Patents

15000

Drawings

10490

Insurance

1200

Debtors

29000

Taking into account the following adjustments, prepare Trading and P/L Account and Balance Sheet.

Stock in hand on 31st December is Rs. 13,600.

Machinery is to be depreciated at the rate of 10% and patents at the rate 20%.

Salaries due for the month of Dec. 2008 amounting Rs. 3000 were unpaid.

Insurance include a premium of Rs. 170 for 2009.

Wage include a sum of Rs. 4000 spent on the erection of a scooter shed for employees and customers.

A provision for bad and doubtful debts is to be created to the extent of 5% on Sundry Debtors.

Q6. Mr.Mayank and Tushar, started a furniture business under the name Life Style Furniture Private Limited. They introduced Rs.3,00,000 towards Equity share capital by way of cash. Formation expenses of Rs.25,000 were duly paid. Company purchased a vacant plot of Rs.1,75,000 and constructed a shed of Rs.50,000. Company purchased one computer of Rs.30,000 and made the payment immediately. During the year company approached Corporation Bank and accepted a secured Term loan of Rs.100,000 @ 10.75% interest p.a. In the first year company paid only interest to the bank. Installment towards principle will start from the second year. Sale for the year were made for Rs.4,50,000 and all the payments received from the customers except one to whom goods were sold in the month of march for Rs.50,000. During the year following expenses were incurred and paid

Purchase of stock Rs. 2,10,000, Wages & Salaries Rs.35,000, Electricity - Rs.5,500, Advertisement Rs.25,000 and delivery expenses Rs.7,500.

Charge depreciation @ 10% on shed and 25% on computers. Stock lying in stores at the end of the year was of Rs.30,000. Make a provision for tax @ 35%.

Prepare Profit & Loss Account and Balance sheet of the company.

Q7. Enter the following transactions in Samir's Journal, post them into ledger and prepare the trial balance.

2008

January 01 -Samir commenced business with Cash -Rs. 40000/-

Feb. 05 -Purchased goods -Rs. 25000/-

Feb. 20 -Sold Goods -Rs. 30000/-

May 10-Purchased Goods from Samuel -Rs. 18000/-

May 18-Sold Goods to Rohan -Rs. 20000/-

June 15-Paid to Samuel -Rs. 18000/-

June 28-Received Cash from Rohan -Rs. 20000/-

August 02 -Purchased goods for cash from Dinesh-Rs. 19000/-

August 29-Withdrawn for personal use -Rs. 500/-

Oct. 10 -Purchased goods from Dinesh -Rs. 17000/-

Nov. 20-Paid cash to Dinesh -Rs. 16980

He allowed discount -Rs. 20

Dec. 31 -Paid Salaries -Rs. 500

Q8. From the following details, prepare the balance sheet of ABC ltd

Stock turnover

6

Capital turnover ratio

2

Fixed assets turnover ratio

4

Gross profit (%)

20

Debt collection period (moths)

2

Creditors payment period (days)

73

The gross profit was Rs.60,000. Closing stock was Rs.5,000 in excess of the opening stock

Q9 Taj Metals expects 5,500 units to be sold during the month of January 2011. Selling price is expected to be Rs 1,200 per unit. Two kilograms of direct materials are budgeted per unit at a cost of Rs 10.00 per kilogram. Three direct labor-hours are budgeted per unit at Rs35.00 per hour. Variable overhead is budgeted at Rs 40.00 per direct labor-hour. Fixed overhead is budgeted at Rs 27,000 per month. Variable nonmanufacturing costs are expected to be Rs 0.70 per revenue rupee. Fixed nonmanufacturing costs are Rs 39,000 per month.

Assume that target ending finished goods inventory is 400 units. Beginning finished goods inventory is 500 units. How many units need to be produced?

Each finished unit requires 10 kilograms of direct materials at a cost of Rs 10.00 per kg. Desired ending direct materials inventory equals 15% of the materials required to produce next month's sales. February sales are forecasted to be 8,000 units. What is the ending inventory of direct materials in January? What is the beginning inventory of direct materials in January?

Q10. Suppose a city has a $100,000 lump-sum budget appropriation to conduct a clinical counseling program. Variable cost per prescription is $400 per patient per day. Fixed costs are $60,000 in the relevant range of 50 to 150 patients.

If the city spends the entire budget appropriation, how many patients can it serve in a year?

If the city cuts the total budget appropriation by 10%, how many patients can it serve in a year?

Q11.a) Explain the concept of Fixed Assets and Depreciation . Can a company change the method of depreciation? If yes then how to give accounting treatment for the change of method ?

b) A company has purchased a machine of Rs.1,00,000 with estimated life of 5 years and the residual value of the machine at the end of the life is Rs.5,000. The usage of the machine in number of units through out the life is 50,000 units whereas the production from the machine per year will be 1st year - 18,000 units, 2nd year - 12,000 units, 3rd year - 10,000 units , 4th year - 6,000 units and 5th year - 4,000 units.

Calculate the depreciation by using 1. Straight Line Method 2. Written Value Method .

Q12. From the following information, show the calculations of depreciation for all the five years under 1. Straight Line Method 2. Written Down Value Method

Sancheti Diagnostic Centre has bought an X-ray machine of Rs.8,00,000. The life of the machine is 5 years and residual value is Rs.80,000. Total capacity of the machine in hours is 1,00,000 whereas the utilization is -1st year 35,000 hours, 2nd year -30,000 hours, 3rd year - 15,000, 4th year -12,000 hours and 5th year - 8,000 hours

Q13. On 1-1-2005 T Ltd purchased a second hand machinery for Rs.80,000 and spend Rs.20,000 on its cartage, repairs and installation. On 31st September 2007 this machine is sold for Rs.50,000. Depreciation is to be provided @ 20% p.a. according to written down value method.

Required: Prepare Machinery Account for the first three years assuming that the accounts are closed on 31st march each year

Q14. Following are the Balance Sheets of Titan Motors Ltd. Prepare a Cash Flow Statement for the year 2005 as per the format given in Accounting Standard - 3

Liabilities

2004

2005

Assets

2004

2005

Share Capital

2,00,000

2,50,000

Land & Buildings

2,00,000

1,75,000

General Reserve

20,000

25,000

Plant & Machinery

1,75,000

1,95,000

Profit & Loss A/c

60,000

50,000

Investments

75,000

80,000

Term Loans

2,50,000

2,25,000

Stock

50,000

60,000

Creditors

40,000

35,000

Debtors

40,000

35,000

Cash

30,000

40,000

Total

5,70,000

5,85,000

Total

5,70,000

5,85,000

During the year 2005, company has declared and paid a dividend of Rs.20,000 on its share capital

Q15. Following details are available from the books of accounts of Sarita Chemicals Limited for the year ended on 31st March, 2009

Stock of materials - Opening 1,68,000

Stock of materials - Closing 1,80,000

Materials purchased during the year 9,52,000

Direct wages paid 3,58,000

Indirect wages 16,000

Salaries to administrative staff 48,000

Freight - Inward 40,000

Freight - Outward 32,000

Cash discount allowed 14,000

Bad debts written off 10,800

Repairs to plant and machinery 42,400

Rent, rates and taxes - Factory 12,000

Rent, rates and taxes - Office 6,400

Traveling expenses 12,400

Salesman's salaries and commission 33,600

Depreciation written off - Plant and Machinery 28,400

Depreciation written off - Furniture 2,400

Directors fees 34,000

Electricity charges ( factory ) 48,000

Fuel ( for boiler ) 64,000

General charges 24,800

Manager's Salary 48,000

Dividend paid 25,000

The managers time is shared between the factory and the office in the ratio of 40: 60

From the above prepare the cost sheet.

Q16. N ltd was following LIFO method of valuation of stock. Due to promulgation of revised accounting standard, they want to switch over to FIFO method. From the following information

Draw up stock ledger under FIO method of valuation of stock

Find out the closing stock and cost of materials consumer under FIFO

Opening stock 5,000 MT

Rs.22 per MT

Rs.1,10,000

Purchases

1.6.2010

1,000 MT @ Rs.30 per MT

5.6.2010

2,000 MT @ Rs.35 per MT

10.6.2010

1,500 MT @ Rs.38 per MT

15.6.2010

1,500 MT @ Rs.35 per MT

20.6.2010

2,000 MT @ Rs.32 per MT

25.6.2010

2,000 MT @ Rs.35 per MT

30.6.2010

1,500 MT @ Rs.30 per MT

Issues:

1-5.6.2010

2,000 MT

6-10.6.2010

3,000 MT

11-20.6.2010

4,000 MT

21-25.6.2010

3,000 MT

26-30.6.2010

3,000 MT

Q17. Concept India Ltd supplies the following information relating to the financial year ended on 31st March 2010 and requests you to find out: (a) sales (b) Purchases (c) Sundry creditors (d) sundry debtors and (e) closing stock

Stock velocity : 4 months

Payables velocity : 3 months

Receivables velocity: 2 months

Gross profit Ratio: 20%

Gross Profit for the year was Rs.56,000. Closing stock of the year was Rs.16,000 higher than the opening stock. Bill receivable and Bills Payable amounted to Rs.40,000 and Rs.23,000 on the closing date of the financial year. 25% of Purchases and 10% of sales were on cash basis.

Q18. A company is considering an investment proposal to install new milling controls at a cost of Rs.50,000. The facility has a life expectancy of 5 years and no salvage value. The tax rate is 35 per cent. Assume the firm uses straight line depreciation and the is allowed for tax purchases. The estimated cash follows before depreciation and tax (CFBT) from the investment proposal are as follows:

Year

CFBT

1

Rs.10,000

2

Rs.10,692

3

Rs.12,769

4

Rs.13,462

5

Rs.20,385

Compute the following:

Pay back period

Average rate of return

Internal rate of rate of return

Net present value at 10 per cent discount factor

Profitability Index

Q19. A limited company is considering investing in a projects requiring a capital outlay of Rs.2,00,000. Forecast for annual income after depreciation but before tax is as follows

Year

Rs

1

1,00,000

2

1,00,000

3

80,000

4

80,000

5

40,000

Depreciation may be taken as 20% on original cost and taxation at 50% of net income

You are required to evaluate the project according to each of the following methods:

Pay back method

Rate of return on average investment method

Net present value method taking cost of capital as 10%

Internal rate of rate of return

Q20.The following date relate tos the working of a factory at Mumbai for the current year:

Capacity worked, 50 per cent

Fixed costs:

Salaries

Rs.84,000

Rent and taxes

Rs.56,000

Depreciation

Rs.70,000

Other administrative expenses

Rs.80,000

Variable costs:

Materials

Rs.2,40,000

Labour

Rs.2,56,000

Other expenses

Rs. 38,000

Possible sales at various levels of working are

Capacity (per cent)

Sales

60

Rs.9,50,000

75

Rs.11,50,000

90

Rs.13,75,000

100

Rs.15,25,000

Prepare a flexible budget and show the forecast of profit at 60,75,90 and 100 percent capacity operation.

Q21. The expenses for budgeted production of 10,000 units in a factory are furnished below:

Per unit Rs.

Materials

70

Labour

25

Variable overhead

20

Fixed overheads (Rs.1,00,000)

10

Variable expenses (Direct)

5

Selling expense (10%fixed)

13

Distribution expenses (20% fixed)

7

Administration expenses (Rs.50,000)

5

Total cost

Rs.155

Prepare a budget for production of : (a) 8,000 units (b) 6,000 units and (c ) Indicate cost per unit at both the levels

Assume that administration expanses are fixed for all levels of production.

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