JNTU
JNTU MCA 2018 ACCOUNTING AND FINANCIAL MANAGEMENT Previous Question Paper (January - 2018 - R13)
Note: This question paper contains two parts A and B. Part A is compulsory which carries 20 marks. Answer all questions in Part A. Part B consists of 5 Units. Answer any one full question from each unit. Each question carries 8 marks and may have a, b, c as sub questions.
PART - A
Prepare a trial balance from the following information: Cash: 25000, Sundry Debtors: 25000, Sales: 75000, Equity Share Capital: 120000, Sales Returns: 5000, Furniture: 10000, Closing Stock: 45000, Land and Building: 125000, Short-term Loan: 10000, Outstanding Salaries: 5000, Long-term Loan: 25000.
Answer
| Particulars | Debit (Rs.) | Credit (Rs.) |
|---|---|---|
| Cash | 25,000 | - |
| Sundry Debtors | 25,000 | - |
| Sales | - | 75,000 |
| Equity Share Capital | - | 1,20,000 |
| Sales Returns | 5,000 | - |
| Furniture | 10,000 | - |
| Land and Building | 1,25,000 | - |
| Short-term Loan | - | 10,000 |
| Outstanding Salaries | - | 5,000 |
| Long-term Loan | - | 25,000 |
| Total | 1,90,000 | 2,35,000 |
Note: Closing stock is typically an adjustment outside the trial balance. If included, it would appear as a debit balance of 45,000, balancing the totals to 2,35,000.
Amar Manufacturers Ltd reported the following results for the financial year 2016-17. Revenue: 2,30,000; Variable Cost: 1,15,000; Fixed Cost: 50,000; Interest: 10,000. Determine the operating leverage, financial leverage and combined leverage for the firm.
Answer
Given: Revenue = 2,30,000; Variable Cost = 1,15,000; Contribution = 1,15,000; Fixed Cost = 50,000; EBIT = 65,000; Interest = 10,000; EBT = 55,000.
- Operating Leverage = Contribution / EBIT = 1,15,000 / 65,000 = 1.77
- Financial Leverage = EBIT / EBT = 65,000 / 55,000 = 1.18
- Combined Leverage = Operating Leverage × Financial Leverage = 1.77 × 1.18 = 2.09
What are the ratios useful to determine the long-term solvency of a company?
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Harvest Industries is selling its product at a price of Rs.250 per unit. Its variable cost ratio is 65%. The annual fixed costs are Rs.2,50,000. The company is planning to reduce the selling price to Rs.225 per unit. What will be the increase or decrease in the breakeven point?
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A company wants to purchase an asset that costs Rs.250,000. The annual Cash Flows after taxes are expected to be Rs.55,000. The company accepts any investment which has a pay-back period of 3 years or less. Should the company buy the asset?
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PART - B
The following Trial Balance is presented for Harper Corporation at the end of September 2017: Cash 20,100; Debtors 2,600; Stationery 500; Equipment 8,000; Creditors 5,400; Advance from Customers 1,100; Paid-up Share Capital 15,300; Reserves & Surplus 9,400. Transactions in October: Received 600 cash from debtors; Services performed on credit: 7,500; Paid Salaries: 200; Cleared 50% of Creditors dues; Customers adjusted advance; Stationary consumed: 250. Prepare Ledger Accounts and Trial Balance for October 2017.
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Discuss the following accounting principles with suitable examples:
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Amber Solutions Ltd: Current Dividend: Rs.5.50; Cost of Equity: 15%. Determine the value of equity if the growth rate is i) 0% ii) 5% iii) 10%.
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Dolphin Ltd: Total assets Rs.65,00,000 (funded equally by debt and equity). Cost of debt: 8%; Risk-free rate: 8%; Beta: 1.5; Market return: 16%; Tax rate: 30%. Determine WACC.
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Discuss the role and importance of Finance function in a modern business organization.
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Given financial data for Domestic Ltd and International Ltd, determine: a) Current ratio b) Quick Ratio c) Inventory Turnover Ratio d) Inventory holding days e) Debtors Turnover Ratio f) Average Collection Period.
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Classify the transactions of Omega Corporation Ltd into operating, investing and financing activities and determine the cash balance at the end of the year.
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Alpha Ltd data: Sales 10,000 units; Selling Price Rs.150; Variable Cost Rs.60; Fixed Costs Rs.7,00,000. Determine: a) Break Even Point b) Margin of Safety c) Units to derive profit of Rs.1,20,000 d) Expected profit at 12,000 units.
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Discuss the different components of a master budget.
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What are the different sources of long-term finance a company can use to fund its assets?
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A project requires initial investment of Rs.12,50,000 and has a 5-year life. Cash Flows: Rs.3,00,000 (years 1-3) and Rs.3,50,000 (years 4-5). If cost of capital is 12%, determine the NPV.
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