ASSIGNMENT
Course Code : MS - 4
Course Title : Accounting and finance for managers
Assignment Code : MS-4/TMA/SEM - I /2012
Coverage : All Blocks
Note: Answer all the questions and submit this assignment on or before April 30, 2012, to the coordinator of your study center.
1. The Balance Sheet of Bharat Machinery Ltd., as on December 31, 2009 and 2010 are as follows:
Items
Dec. 31, 2009
Rs.
Dec. 31, 2010
Rs.
Assets
Plant and Machinery
5,00,000
8,00,000
Land and Buildings
80,000
1,20,000
Stock
1,00,000
75,000
Sundry Debtors
1,50,000
1,60,000
Cash
20,000
20,000
8,50,000
11,75,000
Liabilities and Capital
Share Capital
5,00,000
7,00,000
Profit and Loss A/c
1,00,000
1,60,000
General Reserve
50,000
70,000
Sundry Creditors
1,53,000
1,90,000
Bills Payable
40,000
50,000
Outstanding Expenses
7,000
5,000
8,50,000
11,75,000
Additional Information
(i) Depreciation of Rs. 50,000 has been charged on Plant and Machinery during the year 2010.
(ii) A piece of machinery was sold for Rs. 8,000 during the year 2010. It had cost Rs. 12,000, depreciation of Rs. 7,000 had been provided on it.
Prepare a schedule of change in working capital and a statement showing the sources and application of funds for the year 2010.
2. From the following cost, production and sales data of Decors Motor Ltd., prepare comparative income statement for three years under (i) absorption costing method, and (ii) marginal costing method. Indicate the unit cost for each year under each method. Also evaluate the closing stock. The company produces a single article for sale.
Particulars
Year
2008
2009
2010
Selling Price per unit
20
20
20
Variable manufacturing cost per unit
10
10
10
Total fixed manufacturing cost
5000
5000
5000
Opening Stock (Units)
-
-
500
Units Produced
1000
1500
2000
Units Sold
1000
1000
1500
Closing Stock (Units)
-
500
1000
3. From the following information related to XYZ Ltd.; you are required to find out (a) contribution (b) Break-even point in units (c) Margin of safety, (d) Profit
Total Fixed Costs Rs. 6,000
Total Variable Costs Rs. 20,000
Total Sales Rs. 32,000
Units Sold 4,000 Units
Also calculate the volume of sales to earn profit of Rs. 12,000.
4. Write short notes on the following:
a) Performance budgeting
b) Zero base budgeting
c) Factors affecting dividend decisions
d) Accrual concept
5. What is capital structure? Explain the features and determinants of an appropriate capital structure.
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