Master of Business Administration Mb0041
-
Upload
kaushal-kumar -
Category
Documents
-
view
219 -
download
0
Transcript of Master of Business Administration Mb0041
-
8/3/2019 Master of Business Administration Mb0041
1/24
MASTER OF BUSINESS
ADMINISTRATION
NAME KAUSHAL KUMAR
REGISTRATION NO. 521101945 LEARNING
CENTER NAME
LEARNING CENTER CODE
COURSE MBA
SEMESTER 1
SUBJECT MB0041
SET NO.
DATE OF SUBMISSION
MARKS AWARDED
Directorate of Distance Learning
Sikkim Manipal University
II Floor, Syndicate Building
Manipal 576 104
Signature of the Coordinator Signature of the LC Signature of Evaluator
-
8/3/2019 Master of Business Administration Mb0041
2/24
Master of Business Administration - MBA Semester 1
MB0041 Financial and Management Accounting
Assignment Set- 1 (60 Marks)
Note: Each question carries 10 Marks. Answer all the questions.
Question.1 Assure you have just started a Mobile store. You sell
mobile sets and currencies of Airtel, Vodaphone, Reliance and
BSNL. Take five transactions and prepare a position statement
after every transaction. Did you firm earn profit or incurred
loss at the end? Make a small comment on your financial
position at the end.
-
8/3/2019 Master of Business Administration Mb0041
3/24
Question .2a.List the accounting standards issued by ICAI.
2b. Write short notes of IFRS.
Answer.2 (a) Accounting Standards (ASs)
AS 1 Disclosure of Accounting Policies
AS 2 Valuation of Inventories
AS 3 Cash Flow Statements
AS 4 Contingencies and Events Occurring after the Balance Sheet Date
AS 5 Net Profit or Loss for the period, Prior Period Items and Changes in
Accounting Policies
AS 6 Depreciation Accounting
AS 7 Construction Contracts (revised 2002)
AS 8Accounting for Research and Development
AS 9 Revenue Recognition
AS 10Accounting for Fixed Assets
AS 11 The Effects of Changes in Foreign Exchange Rates (revised 2003)
AS 12Accounting for Government Grants
AS 13Accounting for Investments
AS 14Accounting for Amalgamations
AS 15 Employee Benefits Limited Revision to Accounting Standard (AS)
15, Employee Benefits
AS 15 (issued 1995) Accounting for Retirement Benefits in the Financial
Statement of Employers
AS 16 Borrowing Costs
AS 17 Segment Reporting
-
8/3/2019 Master of Business Administration Mb0041
4/24
AS 18, Related Party Disclosures
AS 19 Leases
AS 20 Earnings Per Share
AS 21 Consolidated Financial Statements
AS 22Accounting for Taxes on Income.
AS 23Accounting for Investments in Associates in Consolidated Financial
Statements
AS 24 Discontinuing Operations
AS 25 Interim Financial Reporting
AS 26 Intangible Assets
AS 27 Financial Reporting of Interests in Joint Ventures
AS 28 Impairment of Assets
AS 29 Provisions, Contingent` Liabilities and Contingent Assets
AS 30 Financial Instruments: Recognition and Measurement and Limited
Revisions to AS 2, AS 11 (revised 2003), AS 21,
AS 23, AS 26, AS 27, AS 28 and AS 29
AS 31, Financial Instruments: Presentation Accounting Standard (AS) 32,
Financial Instruments: Disclosures, and limited revision to
Accounting Standard (AS) 19, Leases
IFRS
The IFRS Foundation is an independent, not-for-profit private sectororganization working in the public interest. Its principal objectives are: to develop a single set of high quality, understandable, enforceable and
globally accepted international financial reporting standards (IFRSs)through its standard-setting body, the IASB;
to promote the use and rigorous application of those standards;
-
8/3/2019 Master of Business Administration Mb0041
5/24
to take account of the financial reporting needs of emerging economiesand small and medium-sized entities (SMEs); and
to bring convergence of national accounting standards and IFRSs to highquality solutions.
The governance and oversight of the activities undertaken by the IFRSFoundation and its standard-setting body rests with its Trustees, who are alsoresponsible for safeguarding the independence of the IASB and ensuring thefinancing of the organisation. The Trustees are publicly accountable to aMonitoring Board of public authorities.Standard-settingThe IASB (International Accounting Standards Board)The IASB is the independent standard-setting body of the IFRS Foundation. Its
members (currently 15 full-time members) are responsible for thedevelopment and publication of IFRSs, including the IFRS for SMEs and forapproving Interpretations of IFRSs as developed by the IFRS InterpretationsCommittee (formerly called the IFRIC). All meetings of the IASB are held inpublic and webcast. In fulfilling its standard-setting duties the IASB follows athorough, open and transparent due process of which the publication ofconsultative documents, such as discussion papers and exposure drafts, forpublic comment is an important component. The IASB engages closely withstakeholders around the world, including investors, analysts, regulators,business leaders, accounting standard-setters and the accountancy profession.
The IFRS Interpretations CommitteeThe IFRS Interpretations Committee (formerly called the IFRIC) is the
interpretative body of the IASB. The Interpretations Committee comprises 14
voting members appointed by the Trustees and drawn from a variety of
countries and professional backgrounds. The mandate of the Interpretations
Committee is to review on a timely basis widespread accounting issues that
have arisen within the context of current IFRSs and to provide authoritative
guidance (IFRICs) on those issues. Interpretation Committee meetings are opento the public and webcast. In developing interpretations, the Interpretations
Committee works closely with similar national committees and follows a
transparent, thorough and open due process.
-
8/3/2019 Master of Business Administration Mb0041
6/24
Question.3 Prepare a Three-column Cash Book of M/s Thuglak &
Co. from The following particulars:
20X1 Jan 1. Cash in hand Rs. 50,000, Bank Overdraft Rs. 20,000
2. Paid into bank Rs. 10,000
3. Bought goods from Hari for Rs, 200 for each
4. Bought goods for Rs. 2,000 paid cheque for them, discount allowed
1%
5. Sold goods to Mohan for each Rs. 1.175
6. Received a cheque from Shyam to whom goods were sold for Rs.
800.Discount allowed 12.5%
7. Shyams cheque deposited into bank
8. Purchased an old typewriter for Rs. 200 , Spent Rs. 50 on its repairs
9. Bank notified that Shyams cheque has been returned dishonoredand debited the account in respect of charges Rs. 10
10.Received a money order Rs. 25 from Hari
11.Shyam settled his account by means of a cheque for Rs. 820, Rs. 20
being for interest charged.
12.Withdrew from the bank Rs. 10,000
18.Discounted a B/E for Rs. 1,000 at 1% through bank
20. Honored our own acceptance by cheque Rs. 5,000
22. Withdrew fir personal use Rs. 1,000
-
8/3/2019 Master of Business Administration Mb0041
7/24
24. Paid tread expenses Rs. 2,000
25. Withdrew from bank for private expenses Rs. 1,500
26. Purchased machinery from Rajiv for 5,000 and paid him by meansof a bank draft purchased for Rs. 5,005
27. Issued cheque to Ram Saran for cash purchased of furniture Rs.
1,575
28. Received a cheque for commission Rs. 500 from R.& Co. and
deposited into bank
29. Ramesh who owned us Rs. 500 became bankrupt and paid us 50
paise in the rupee
30. Received payment of a loan of Rs. 5,000 and deposited Rs. 3,000
out of into bank
31. Paid rent to landlord Mohan by cheque of Rs. 220
31. Interest allowed by bank Rs. 30
31. Half-yearly bank charges Rs. 50
-
8/3/2019 Master of Business Administration Mb0041
8/24
Answer.3:-
-
8/3/2019 Master of Business Administration Mb0041
9/24
Question.4 Choose an Indian Company of your choice that has
adopted Balance Score Card and detail on it.
Answer.4Tata motors
Tata Motors is the first Indian company to be inducted in the Balance ScorecardHall of Fame. Joins the thirty-member elite club of organizations includingHilton Hotels, BMW Financial Services, US Army, Korea Telecom and NorwegianAir Force for achieving excellence in performance.The commercial vehicle business unit (CVBU) of Tata Motors, India's largestautomobile manufacturer, received prestigious Balanced ScorecardCollaborative, The coveted Steuben crystal 'Rising Star' trophy was presented atBalanced Scorecard Asia Pacific Summit held at Australia.Tata Motors-CVBU has been recognized for having achieved a significant
turnaround in its overall performance. The implementation of the BalancedScorecard has enabled greater focus on different elements of operational
performance. Defining, cascading and communicating strategies across the
organisation have brought about transparency and alignment. The scorecard
incorporates SQDCM (safety, quality, delivery, cost and morale) and VMCDR
(volume, market share, customer satisfaction, dealer satisfaction and
receivables).Ravi Kant, executive director, CVBU, Tata Motors, said, "While we
were conscious of the benefits of the Balanced Scorecard when we began
implementing it three years back, we are extremely pleased that it has helpedus achieve significant improvements in our overall performance. I am quite
positive that the BSC will play an important part in our objective to become a
world-class organization."Balanced Scorecard Collaborative president Dr
David P Norton said, "We created the Hall of Fame to publicly acknowledge
the hard work and remarkable results of implementing the Balanced
Scorecard to create the strategy-focused organization. The Balanced
Scorecard Hall of Fame pays tribute to the success that each organization has
attained. Tata Motors- CVBU shares the honor with the city of Brisbane andKorea Telecom (KT).The Balanced Scorecard (BSC) concept-created by Dr
Robert S Kaplan and Dr David P Norton in 1992, has been implemented in
thousands of corporations, organizations, and government agencies
worldwide. Based on the simple premise that "measurement motivates," the
BSC puts strategy at the centre of the management process, allowing
-
8/3/2019 Master of Business Administration Mb0041
10/24
organizations to implement strategies rapidly and reliably. Balanced
Scorecard Collaborative, Inc. is a new kind of professional services firm
dedicated to the worldwide awareness, use, enhancement, and integrity of the
Balanced Scorecard as a value-added management process. Tata Motors range
of commercial vehicles spans over 135 models and can haul loads rangingfrom 2 to 40 tones. The product portfolio also includes 12 to 60-seater buses,
tippers and tractor-trailers. Tata Motors vehicles meet the stringent Euro
emission norms. The company currently has an export base in most parts of
SouthAsia, Africa, Middle East and Europe. Tata Motors recently crossed the
3-million production milestone
Question.5 From the following data of Jagdish Company
prepare (a) a statement of source and uses of working capital
(funds) (b) a schedule of changes in working capital
Assets 2008 2007
Cash 1,26,000 1,14,000
Short-term investment 42,400 20,000
Debtors 60,000 50,000
Stock 38,000 28,000
Long term Investment 28,000 44,000
Machinery 2,00,000 1,40,000
Building 2,40,000 80,000
Land 14,000 14,000
Total 7,48,400 4,90,000
Liabilities and Equity
Accumulated depreciation 1,10,000 60,000
-
8/3/2019 Master of Business Administration Mb0041
11/24
Creditors 40,000 30,000
Bills Payable 20,000 10,000
Secured loans 2,00,000 1,00,000
Share capital 2,20,000 1,60,000
Share premium 24,000 Nil
Reserves and surplus 1,34,400 1,30,000
Total 7,48,400 4,90,000
Income statement
Sales 2,40,000
Cost of goods sold 1,34,600
Gross Profit 1,05,200
Less Operating expenses:
Depreciation machinery 20,000
Depreciation building 32,000
Other expenses 40,000 92,000
Net profit from operation
13,200
Gain on sale on long-term investment 4,800
Total 18,000
Loss on sale of machinery 2,000
Net Profit 16,000
-
8/3/2019 Master of Business Administration Mb0041
12/24
Adjustments:
1)Machinery worth Rs.70000 was purchased and worth Rs.10000 was sold
during the year [Accumulated depreciation on machinery is Rs.18000
after adjusting depreciation on machinery sold]. Proceeds from the sale ofmachinery were Rs.6000
2)Dividends paid during the year Rs.11600
Answer.5
Schedule of change in working capital
-
8/3/2019 Master of Business Administration Mb0041
13/24
-
8/3/2019 Master of Business Administration Mb0041
14/24
Question.6 What is a cash budget? How it is useful in
managerial decision making?
Answer.6Cash budget is an estimation of the cash inflows and outflows for
a business or individual for a specific period of time. Cash budgets are oftenused to assess whether the entity has sufficient cash to fulfill regular
operations and/or whether too much cash is being left in unproductive
capacities. A cash budget is extremely important, especially for small
businesses, because it allows a company to determine how much credit it can
extend to customers before it begins to have liquidity problems. For
individuals, creating a cash budget is a good method for determining where
their cash is regularly being spent. This awareness can be beneficial because
knowing the value of certain expenditures can yield opportunities foradditional savings by cutting unnecessary costs. For example, without setting
a cash budget, spending a dollar a day on a cup of coffee seems fairly
unimpressive. However, upon setting a cash budget to account for regular
annual cash expenditures, this expenditure comes out to an annual total of
$365, which may be better spent on other things. If you frequently visit
specialty coffee shops, your annual expenditure will be substantially more.
The importance of cash budget may be summarized as follow:-
(1) Helpful in Planning. Cash budget helps planning for the most efficient use
of cash. It points out cash surplus or deficiency at selected point of time and
enables arrange for the deficiency before time or to plan for investing the
surplus money as profitable as possible without any threat to the liquidity.
(2) Forecasting the Future needs. Cash budget forecasts the future needs of
funds, its time and the amount well in advance. It, thus, helps planning for
raising the funds through the most profitable sources at reasonable terms and
costs.
(3) Maintenance of Ample cash Balance. Cash is the basis of liquidity of the
enterprise. Cash budget helps in maintaining the liquidity. It suggests
adequate cash balance for expected requirements and a fair margin for the
contingencies.
-
8/3/2019 Master of Business Administration Mb0041
15/24
(4) Controlling Cash Expenditure. Cash budget acts as a controlling device.
The expenses of various departments in the firm can best be controlled so as
not to exceed the budgeted limit.
(5) Evaluation of Performance. It acts as a standard for evaluating thefinancial performance.
(6)Testing the Influence of proposed Expansion Programme. Cash budget
forecasts the inflows from a proposed expansion or investment programme
and testify its impact on cash position.
(7) Sound Dividend Policy. Cash budget plans for cash dividend to
shareholders, consistent with the liquid position of the firm. It helps in
following a sound consistent dividend policy.(8) Basis of Long-term Planning and Co-ordination. Cash budget helps in
co-coordinating the various finance functions, such as sales, credit, investment,
working capital etc. it is an important basis of long term financial planning
and helpful in the study of long term financing with respect to probable
amount, timing, forms of security and methods of repayment.
-
8/3/2019 Master of Business Administration Mb0041
16/24
Master of Business Administration - MBA Semester 1
MB0041 Financial and Management Accounting
Assignment Set- 2 (60 Marks)
Note: Each question carries 10 Marks. Answer all the questions.
Question.1Selected financial informationabout Vijay merchant
company is given below:
2010 2009
Sales 69,000 43,000
Cost of Goods Sold 57,000 32,500
Debtors 7,200 3,000
Inventories 11,400 5,500
Cash 1,500 800
Other current assets 4,000 2,700
Current liabilities 16,000 11,000
-
8/3/2019 Master of Business Administration Mb0041
17/24
Compute the current ratio, quick ratio, average debt collection period and
inventory turnover for 2009 and 2010. State whether there is a favorable or
unfavorable change in liquidity from 2009 to 2010. At the beginning of 2009,
the company had debtors of Rs..2500 and inventory of Rs.3000 .
Answer.1
Question.2 . Explain different methods of costing. Your answer
should be studded with examples (preferably firm name and
product) for each method of costing.
Answer.2 This is a product related classification of costing system. The cost is
ascertained for each job or work order processed. This system is used where
most of the manufacturing activities are planned and carried out for distinct
-
8/3/2019 Master of Business Administration Mb0041
18/24
jobs or customers. The utility of this method increases when there is great
variability in nature of jobs or work orders processed
Batch Costing : This method determines the cost associated with each batch pf
products manufactured. This differs from job or work order costing in thevariability of the production batches. In this case the production batches consist
of mostly standard products or components. What varies is mostly the size of
batches and the timing of their processing.
Process Costing: In this method of costing the costs are determined for various
different manufacturing activities or processes. These costs are the assigned to
different products on the basis of some criteria like quantity processed or the
time taken for processing. This method of costing is suitable for manufacturing
units that use continuous processes or mass production techniques. Thismethod is particularly suitable where there are many different products and
process routes, where output of one process becomes input for another.
Operation Costing: This method is similar to the process costing. However the
products manufactured have limited variation. For example a cement plant may
use this method.
Multiple costing: Most of the organizations use a combination of different
costing method rather than just one method. Multiple costing refers to suchcombinations of different methods.
Question.3. State the importance of differentiating between the
fixed costs and variable costs in managerial decision.
Answer.3 Variable costs are costs that can be varied flexibly as conditions
change. In the John Bates Clark model of the firm that we are studying, laborcosts are the variable costs. Fixed costs are the costs of the investment goods
used by the firm, on the idea that these reflect a long-term commitment that can
be recovered only by wearing them out in the production of goods and services
for sale. The idea here is that labor is a much more flexible resource than capital
investment. People can change from one task to another flexibly (whether
-
8/3/2019 Master of Business Administration Mb0041
19/24
within the same firm or in a new job at another firm), while machinery tends to
be designed for a very specific use. If it isn't used for that purpose, it can't
produce anything at all. Thus, capital investment is much more of a
commitment than hiring is. In the eighteen-hundreds, when John Bates Clark
was writing, this was pretty clearly true. Over the past century, a) educationand experience have become more important for labor, and have made labor
more specialized, and b) increasing automatic control has made some
machinery more flexible. So the differences between capital and labor are less
than they once were, but all the same, it seems labor is still relatively more
flexible than capital. It is this (relative) difference in flexibility that is expressed
by the simplified distinction of long and short run. Of course, productivity and
costs are inversely related, so the variable costs will change as the productivity
of labor changes.
Here is a picture of the fixed costs (FC), variable costs (VC) and the total of both
kinds of costs (TC) for the productivity.
Output produced is measured toward the right on the horizontal axis. The cost
numbers are on the vertical axis. Notice that the variable and total cost curves
are parallel, since the distance between them is a constant number -- the fixed
cost
-
8/3/2019 Master of Business Administration Mb0041
20/24
Question.4 . Following are the extracts from the trial balance of a
firm as at 31st March 2009
Name of the account Dr Cr
Sundry debtors 2,05,000
Bad debts 3,000
Additional Information
1)After preparing the trial balance, it is learnt that Mr.X a debtor has
become insolvent and nothing could be recovered from him and,
therefore the entire amount of Rs.5,000 due from him was irrecoverable.
2)Create 10% provision for doubtful debt.
Required: Pass the necessary journal entries and show the sundry debtors
account, bad debts account, provision for doubtful debts account, P&L a/c and
Balance sheet as at 31st March 2009.
Answer.4
Sundry debtors 205000
Less :- Bad debt 5000less :- PBD 20000
180000
-
8/3/2019 Master of Business Administration Mb0041
21/24
-
8/3/2019 Master of Business Administration Mb0041
22/24
Question.5 A change in credit policy has caused an increasein sales, an increase in discounts taken, a decrease in the amount
of bad debts, and a decrease in investment in accounts
receivable. Based upon this information, the companys (select
the best one and give reason)
1)Average collection period has decreased2)
Percentage discount offered has decreased
3)Accounts receivable turnover has decreased4)Working Capital has increased
Answer.5
Average collection period has decreased
Since sales have increased, you would expect accounts receivable to increase
too, if the Average collection period remained the same.
But you're told that AR has decreased, so the Average collection period must
have decreased, i.e. the customers are taking fewer days to pay up.
-
8/3/2019 Master of Business Administration Mb0041
23/24
Question.6 Identify the users of accounting information.
Answer.6 Accounting plays a very important role in all businesses but it is not
just the business itself that finds accounting information useful. There are
other stake holders who rely on accounting information to make decisions.
These stakeholders include:
1. Shareholders - Shareholders use the balance sheet and profit and loss
account produced by limited companies to decide if they are going to increase
or decrease their holding.
2. Management- Management in every level of the business from director level
to supervisor level rely on accounting information to do their job properly.
They all use the same information for different purposes. For example,
directors use it for strategic purposes and middle management can use it to
see if they are meeting their financial targets.
3. Suppliers - Along with other data suppliers will look at a company's balance
sheet and profit and loss account to see if and how much credit they are
willing to give to present and potential customers.
4. Lenders - Similar to suppliers lenders also need to make sure a company is
in a healthy financial situation before they start to lend money.
5. Government- Governments use the information provided by a company
about its finances to levy tax on the profits.
6. Customers - Before another company becomes a customer or enters into a
joint venture, they will look at the company's finances to make sure the
company is not in trouble and that their supplies are not about to dry up.
-
8/3/2019 Master of Business Administration Mb0041
24/24
7. Employees - Employees also have an interest in how well their employer is
doing so use financial accounting information for this purpose