Financial Accounting

SIES COLLEGE OF MANAGEMENT STUDIES, NERUL, NAVI MUMBAI – 400 706
MMS Semester 1 2018-20

FINANCIAL ACCOUNTING
Maximum Marks: 60 Date:17/12/18 Duration: 180min Time:10am to 1pm
Instructions: Question No.1 is compulsory carrying 20 Marks. Answer any 04 questions from Question
No.2 to Question No.7 carrying 10 marks each.
Q1 Case Study (20 Marks)

From the following balances extracted from the books of “Galaxy sports” ( a sports equipments shop)
as on 31st March 2018, prepare the final accounts of the concern.
Particulars Debit(Rs.) Credit ( Rs.)
Capital 100,00,000
Drawings 1,00,000
Purchase of Treadmills 105,00,000
Sales of Treadmills 75,00,000
Salaries 3,00,000
Rent of the shop paid 5,00,000
General expenses 10,000
Balan ( Money to be Collected 60,000
from the credit sale)
Creditors 80,000
Furniture 5,00,000
Xerox machine 2,00,000
Electricity bill paid 36,000
Laptops 2,24,000
Mobile phones bill paid 12,000
Deposits in the bank 50,000
Loan taken from bank 15,00,000
Interest on loan taken 2,000
Interest for late payment 600
Purchase of cardio equipments 57,08,400
Printers 1,00,000
Purchase of Delivery van 7,75,000
Sundry Expenses 2,000
TOTAL 1,90,80,000 1,90,80,000
The following adjustments are to be made:

1) Rent due but not paid up to 31st March 2018 Rs.5000.
2) Depreciate Xerox machine by 10%, furniture by 5% .
Q2. Answer any two from a, b & c below carrying 05 marks each.
a) Zydus Cadila’s wellness arm has announced ( BusinessLine,25/10/2018)that it will acquire part
of Heinz India Pvt ltd’s business for Rs.4,595 crores. They will pickup Complan, GluconD, Nycil
and Sampriti(Desi ghee) from Heinz. Post - acquisition Zydus wellness’s turnover will be around
1,700 crores.The deal is proposed to be financed partly by Loans. Explain the concepts Cash
flows from operating activities, Cashflows from investing activities and cash flows from
financing activities based on the above example.
1
b) Balaji caterers want to know the cash and bank balance in their books of accounts at the end of the
month based on the following transactions.
01/4/2018 Sold on cash Rs. 1, 50, 00,000.
10/4/2018 Received cash from customers amounting to Rs.15, 00, 000
15/4/2018 Deposited into Bank account Rs.10, 00, 000
18/4/2018 Cash withdrawn from bank Rs. 5, 00,000
20/4/2018 Cash paid to suppliers amounting to Rs. 3, 00, 000.
30/4/2018 Cash deposited into bank Rs. 10,000
c) . MRF India Ltd acquired a Fixed Asset amounting to Rs150 crores (cost) on 1st April 2016. The
installation cost is Rs. 50 crores. The useful life of the asset is 5 years. The method of depreciation to
be followed is Straight Line Method at 20%.What will be the amount of Depreciation to be charged in
Profit & Loss account for the two years ending 31/3/2018. How much is the value of the asset was
shown in the Balance Sheet for the two years? Will the amount be different if the company changes to
Written Down Value method? If the company wants to book more profits for these two years, What
method do you suggest?
a) Prepare a Cost Sheet based on the following information
Raw material ( Rs.)

Opening stock 20,000
Purchases 2,00,000
Direct wages 6,000

Direct Expenses 4,000
Factory overheads 50,000

Office and administration overheads 35,000
Selling and distribution expenses Rs.3 per unit sold
Units of finished goods

In hand at the beginning of the period (Value Rs. 25,000) 500 (opening stock)
Units produced during the period 10,000
In hand at the end of the period 1000 (closing stock)
Sales is at 20% profit on cost. There is no work-in-progress either at the beginning or at the
end of the period
b) What is Schedule III of companies Act 2013?
c). Accounting is the language of business. Comment.
a) From the following information prepare a Stock Ledger to find out the stock valuation on
30/04/2018 by following a suitable method .
2
Date Receipt Quantity Rate Issue Quantity
( units) units
02/04/2018 1400 Rs. 2 ----
08/04/2018 1800 Rs. 6 ----
15/04/2018 ---- ------ 300
16/04/2018 2600 Rs. 3 ----
20/4/2018 ---- ---- 300
22/4/2018 2400 12 -----
23/4/2018 500 18 ----
24/4/2018 --- ---- 3000
25/4/2018 --- ---- 1600
26/4/2018 500 12 ----
27/4/2018 ---- ---- 300
28/4/2018 300 15 ----
30/4/2018 10 ( shortage)
b) Explain the importance of Final Accounts of any concern.

.
c).For the transactions given below one of the accounts involved is given below. State the other
account and say whether the account mentioned by you will be debited or credited
1) Rao starts business with Rs.10,000 - Capital
2) Repairs effected to Machinery payment by cheque – Bank
3) Bought a second hand machinery by cash- Cash
4) Furniture sold for cash –Furniture
5) Railway freight paid for machinery- cash
6) Cash sales – Sales
7) Advertising expense paid by cheque- Bank
8) Invested in Government Bonds by cheque – Bank
9) Salaries paid by cash – Cash
10) Goods sold on credit to Ram- Sales
a) Write a note on Indian Corporate frauds. Is Forensic audit a preventive tool?
b) What are Accounting Standards? Write a short note on Ind AS.

c) Prepare a schedule of changes in working capital based on the following information for
the year ended 31/3/2018
PARTICULARS 31/3/2017 31/3/2018
Cash 5,50,000 7,00,000
Bank balance 15,00,000 60,00,000
Closing Inventory 80,000 40,000
Sundry Creditors 1,20,000 10,000
Bills payable 45,000 82,000
Short term Loans 84,000 61,000
3
a) What are intangible assets? Give few examples. Is it subject to Depreciation?
b) Calculate 1) conversion cost 2) Cost of Production
from the following particulars:
Material consumed 5,40,000

Productive wages 7,20,000
Direct Expenses 15,000
Consumable stores 2,000
Oil grease/Lubricating 500
Salary of works Manager 6,000
Stores employees salary - 10,000
Factory Rent 20,00,000
Repair and Depreciation on Machine 600
Sales show room rent Rs.60,000
c). “Active pharmaceutical ingredients (APIs) and drug intermediates maker Divis Laboratories
Limited is creating additional capacities by spending as much as Rs. 15 billion at its existing facilities
in the next 15 months. The company said it would be investing Rs. 6 billion each at its Unit-2 of Vizag
SEZ in Andhra Pradesh and Unit-1 of its Nalgonda SEZ in Telangana to build additional capacities,
besides spending another Rs. 3 billion for debottlenecking of the Unit-2 in Vizag. The capacity
expansion is expected to be completed by the end of calendar year 2019. At present, the company
operates four multi-purpose manufacturing facilities out of these two sites. The management said the
expansion was taken up in order to cater to the increasing opportunities in generic and big pharma
business. The company is engaged in the manufacturing of key ingredients used to make final products
by the formulations companies”.
Based on the above information analyze how the capacity expansion is expected to change the
Financial performance and Financial position of the company in the future.
a) Have you read Director’s report, Auditor’s report and Notes to Accounts of any company?
Explain. How it is important for investors?
b) How Funds Flow statement is different from Cash Flow statement?
c) Why independent directors are important for good corporate governance? Explain with an
example.
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SIES COLLEGE OF MANAGEMENT STUDIES, NERUL, NAVI MUMBAI – 400 706

MMS Semester 1 2018-20

Q1 Case Study (20 Marks)

The following adjustments are to be made:

a) Prepare a Cost Sheet based on the following information

Raw material ( Rs.)

Direct wages 6,000

Factory overheads 50,000

Units of finished goods

b) Explain the importance of Final Accounts of any concern.

a) Write a note on Indian Corporate frauds. Is Forensic audit a preventive tool?

b) What are Accounting Standards? Write a short note on Ind AS.

Material consumed 5,40,000

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