Ignou 2013 (April assignments) : For answers contact us at assignmentssolution@gmail.com

ASSIGNMENT
Course Code              :    MS-4
Course Title                 :      Accounting and Finance for Managers
Assignment Code             :      MS-04/TMA/SEM-I/2013
Coverage                 :    All Blocks
Note : Attempt all the questions and submit this assignment on or before 30th April, 2013 to the coordinator of your study center.

1.    Explain in detail the various accounting concepts and discuss the application of these concepts in the preparation of financial statements.

2.    Fairdeals Ltd. presents the balance sheets as at 31.12.2009 and 31.12.2010 as follows:

    31.12.09    31.12.10
Assets    Rs.        Rs.
Fixed Assets at cost     31,30,000    36,05,000
Less: Depreciation       6,80.000       8,20,000
    24,50,000    27,85,000
Investments    12,50,000    13,50,000
Marketable Securities           60,000         30,000
Inventories      4,10,000      5,20,000
Book Debts      5,30,000       5,05,000
Cash and Bank       1,20,000       1,40,000
Preliminary Expenses       1,00,000          50,000
    49,20,000     53,80,000
Liabilities
Share Capital     20,00,000    25,00,000
Reserve and Surplus       4,20,000      4,70,000
Profit and Loss Account       3,80,000      4,00,000
13.5% Debentures (Convertible)    10,00,000       8,00,000
Mortgage Loan       3,00,000       2,50,000
Current Liabilities       8,20,000       9,60,000
    49,20,000    53,80,000

You are informed that during 2010
(i)    Rs. 2,00,000 of debentures were converted into shares at par;
(ii)    Rs. 1,00,000 shares were issued to a vendor of fixed assets;
(iii)    A machine costing Rs. 50,000 book value Rs. 30,000 as at 31st December, 2009 was disposed off for Rs. 20,000;
(iv)    Rs. 30,000 of marketable securities (cost) was disposed off for Rs. 36,000.
You are required to prepare a schedule of working capital changes and funds flow statement of the company for 2010.

3.    An Analysis of S Ltd. cost records give the following information.
    Variable Cost     Fixed Cost
    (% of Sales)    Rs. 
Direct Material     32.8%    -
Direct Labour     28.4    -
Factory Overhead     12.6    1,89,000
Distribution Overhead        4.1        58,400
Administration Overhead       1.1        66,700

Budgeted sales for the next year is Rs. 18, 50,000. You are required to determine:
(a)    Break even sales value
(b)    Profit at the budgeted sales volume
(c)    Profit if actual sales: (i) drop by 10% (ii) increase by 5% from the sale.

4.    Briefly explain the following
a)    Rolling budget
b)    Performance budgeting
c)    Zero base budgeting
d)    Measures of financial beverage

5.    What is capital structure? Explain the features and determinants of an appropriate capital structure.