CMA

1(a) Profit as shown by the cost books of M/s Mehta Brothers for the year 2004 is rs. 80700. Comparison of the cost books and financial books revealed the following: Item Depreciation Closing stock of finished goods Factory Expenses Office Expenses Interest on Bank deposits Loss on Sale of Furniture Dividend received Advertisement Cost Book Rs. 30000 80000 125000 72000 480000 Financial Books Rs. 35000 65000 120000 75000 9500 3400 9300 45400

Prepare reconciliation statement and a certain profit as per financial book 1(b) A companys trading and profit and loss account was as follows: Trading and Profit & Loss A/c Particulars To purchases 25210 Less clsong stock 4080 To direct wages To works Expenses To selling expenses To administrative expenses To depreciation To net prfit Rs. 21130 10500 12130 7100 5340 1100 2300 77600 Particulars By Sales 50000 units @ Rs. 1.50 each By Discount received By profit on sale of land Rs. 75000 260 2340

77600

The profit as per cost accounts was only Rs. 19770. Reconcile the financial and cost profit using the following information:

(A) Cost accounts value of closing stock was Rs. 4280 (B) The works expenses in cost accounts were taken as 100% of the direct wages (C) Selling and administrative expenses were charged in cost accounts at 10% on sales and Rs. 0.10 per unit respectively. (D) Depreciation in the cost account was Rs. 800 1(c) Walson Ltd. produced and sold 1,000 Washing machines during the year ending 31st March 2007. The summarized Trading And Profit And Loss Account is given below: Rs. To Cost of Materials Consumed To Direct Wages To Works Expenses To Gross Profit c/d 200000 By Sales 200000 100000 300000 800000 To selling and Distribution Expenses To Net Profit By Gross Profit b/d 100000 200000 300000 300000 Rs. 800000

800000 300000

The management estimates the following for te year ending 31st March 2008: 1. Output and Sales will be of 2,000 washing machines 2. Prices of materials and wages Will go up by 25% on the previous years level. 3. Works experiences will rise in proportion to the combined cost of material and wages 4. Selling and distribution expenses per unit are exxtimsted at Rs. 50 Prepare a cost statement showing the price at washing machines could me marketed so as to yield a profit of 10% on selling price. 2(a) The Bengal chemical company Ltd. production passes through two processes A& B. It is ascertained that in each process normally 5 % of the total wt is lost and 10% is scrap which from Process A and B realizes Rs. 80 and Rs. 200 per ton respectively.

The following are the figures relating to both the processes: Items Process A Materials in tons 1000 Cost of Materials in Rs. Per ton 125 Wages in Rs. 28000 Manufacturing expenses in Rs. 8000 Output in tons 830 Prepare process cost A/c showing Cost per ton of each process. 2(b) A manufacturer transfers 60% of production of every process to next process and 40% production to stores at a profit of 20% on cost for sale You are given the following information and asked to prepare process II account: Units brought in from Process I 200 units at accost of Rs. 40000 Unit introduced (in Process II) 500 units @ Rs. 10 Wages Rs. 32500, overheads Rs. 12500 Normal loss is 10% of input 2(c) Th econtract ledhger of the company showed the following expenditure on account of contract numver345 at 31st Dec 2003 Materials Plant Wages Establishment charges Wages Accrued 94000 12000 103000 6000 700 Process B 70 200 10000 5250 780

The contracts commenced on 1st Jan 2003 and a contract price was Rs. 400000 Cash received on account to date was Rs. 172000 representing 80% of the work certified, the remaining 20% being retained until completion. The value of material in hand was Rs. 4500 and the work finished but not certified was Rs. 4000 Prepare an account in the respect of the contract assuming depreciation on plant @ 10% and state the proportion of profit to be taken to the credit of profit and loss account and also show the

particulars relating to the contract would appear in the balance sheet of the company as on 31st Dec 2003.

3(a) Given the following information: Fixed Cost Break-even sales Profit Selling price per unit You are required to calculate: 1. Sales and marginal cost of sales 2. New break-even point if selling price is reduced by 10% 3(b) The following information is extracted by a financial analyst from the books of a manufacturing company Particulars Rs. Rs. 1000000 300000 300000 80000 70000 50000 Sales Variable cost : Direct Material Direct Labour Factory overheads Marketing expenses Administrative expenses Contribution Fixed cost: Factory overheads Marketing expenses Administrative expenses Net profit a) Compute: i) PV ratio ii) Break-even point Rs. 4000 Rs. 20000 Rs. 1000 Rs. 20

800000 200000

50000 30000 20000

100000 100000

b) There is a proposal to increase fixedcost by Rs. 10000, salse and variable cost remaining unchanged. Compute new break-even point

c) Anoother proposal is to increase fixed cost by Rs. 25000 i) ii) Saving Rs. 25000 from direct Labour Saving Rs. 25000 from direct materials

Compute revised: i) ii) iii) 3(c) Given below are the financial statement of ABC company a) Balance sheet as on 31st Dec 2007 Liabilities Share Capital: 7% Pref. Shares (2600 shares @ Rs. 10) Equity Shares (1300 shares @ Rs. 100) Reserve Fund Long term loans Creditors Other current Liabilities Provision for tax Assets Fixed Assets Cash 26000 Investment(short term) Debtors 130000 Inventories 104000 182000 41600 2600 33800 520000 Profit and Loss Account for the year ending 31-12-2002. Rs. Rs. 338000 13000 39000 52000 78000 PV ratio Break-even point Profit of the company

520000 Rs. 390000 335400 54600 22750 31850 5850 26000 10400 15600

Particulars Net Sales Less: Cost of Goods sold Less: Administration Expenses Operating profit Less: Interest Profit before tax(PBT) Less: Tax Net Profit after tax(PAT) Calculate the following ratios:

a) Gross profit ratio b) Net profit Ratio c) Quick Ratio d) Operating Ratio e) Current Ratio f) Debt Equity Ratio g) EPS(Earning per Equity share)

4(a) From the two balance sheets as on 31-12-2000 and 31-12-2001, you are required to prepare statement showing the Flow of Funds: Particulars Liabilities: Trade Creditors Short term Liabililities Outstanding Expenses Mortgage Loan Share Capital Retained Earnings Assets: Cash Debtors Stock Investment Fixed Assets Goodwill Additional Information: (1) During the year 2001 depreciation provided on fixed Assets Rs. 1750. (2) Goodwill written off by Retained earnings (3) During the year 2001 Dividend paid Rs. 3500/-. 4(b) 15000 23500 36500 5000 45750 5000 129750 9000 25000 42000 73000 149000 2000 31200 16300 7500 10000 50000 14750 129750 2001 29100 14900 8000 15000 65000 17000 149000

From the following Balance Sheet prepare a Fund Flow Statement with a supporting Schedule of Working Capital. 2002 Assets: Cash Bills Receivable Land & Building Stock Liabilities: Share Capital Payable Securities(short term) Bills payable Profit & Loss A/c Prov. For Depreciation 4(c) The expenses budgeted for production of 10000 units in a factory is furnished below: Per Unit Rs. 70 25 20 10 5 13 7 5 155 30000 50000 30000 20000 130000 75000 20000 15000 10000 10000 130000 2003 45000 42000 80000 33000 200000 95000 60000 12000 14000 19000 200000

Materials Labour Variable overheads Fixed overheads Variable expenses Selling expenses(10% fixed) Distribution expenses(20% fixed) Administrative Expenses Total cost of sale per unit(to make and sell) Prepare a flexible budget for production of: a) 8000 units b) 6000units and show the result are per unit.

Assume that administrative expenses are rigid for the all level of production

5. (a) Write in short, different methods of allocating works overhead. (b) What do you mean by Retention Money? (c) Explain the objectives of Management Accounting.

(d) Explain the factors affecting working capital.