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- 1. Unit -I Short Questions: 1. Define Accounting. What are its functions and limitations? 2. What are the objectives of financial statements? 3. Define cost accountancy. What are its objectives and limitations? 4. What is Management accounting? What are its functions, advantages and disadvantages? 5. What are the various tools and techniques of Management accounting? 6. Why is Accounting regarded as an aid to management? 7. Explain any three of the accounting concepts 8. What are final accounts? What purpose do they serve? 9. Briefly explain the concept of inflation accounting. What are its merits and demerits? 10. “Accounts ignore inflation and inflation makes a mockery of them.” Explain. 11. Explain the concept of HRA. What are its objectives? 12. Discuss the significance of HRA in the modern business Long Questions: 1. Distinguish between financial, cost and management accounting 2. State the persons who will be interested in accounting information 3. Discuss briefly the accounting concepts and conventions 4. Differentiate between (i) outstanding expenses and prepaid expenses (ii) Outstanding income and incomes received in advance (iii) interest on capital and interest on drawings 5. Write short notes on – (i) manufacturing account (ii) trading account (iii) profit and loss account and (iv) balance sheet. 6. Explain the various adjustments affecting the preparation of a balance sheet. 7. Discuss the various methods of accounting for price level changes. 8. Explain the various methods of HR valuation The following trial balance is extracted from the books of Mr.Pillai on 31.03.2002 PARTICULARS DEBIT CREDIT (Rs) (Rs) Furniture & Fittings 640 - Motor Vehicles 6,250 - Buildings 7,500 - Capital - 12,500 Bad debts 125 - Provision for doubtful debts - 200
- 2. Sundry debtors & Creditors 3,800 2,500 Stock as on 1.4.2002 3,460 - Purchases and Sales 5,415 15,540 Bank Overdraft - 2,850 Sales & Purchase returns’ 200 125 Advertising 450 - Interest on Bank overdraft 118 - Commission - 375 Cash 650 - Taxes & Insurance premium 782 General expenses 1,250 - Salaries 3,300 - TOTAL 34,000 34,000 Adjustments: 1) Stock on hand on 31.3.2002 Rs.3,250 2) Depreciate Buildings @5% pa, Furniture @ 10% pa, Motor Vehicles @ 20% pa 3) Rs.85 is due for interest on bank overdraft 4) Salaries Rs.300 and taxes Rs.200 are outstanding 5) Insurance premium amounting to Rs.100 is prepaid 6) One third of the commission received is in respect of work to be done next year 7) Write off a further sum of Rs.100 as bad debts from debtors and create provision for doubtful debts @ 5% on debtors Prepare a trading and Profit & Loss account and Balance sheet of the company. Unit - II Short Questions 1. What is an accounting cycle? 2. Explain the meaning of the term ‘Journal’ and state its significance 3. What is a ledger? 4. What is a trial balance? 5. What are final accounts? 6. When sales revenue is recognized? 7. What do you mean by inventory valuation? 8. Define fixed assets 9. What is depreciation? 10. Distinguish between depreciation, depletion and amortisation 11. What are intangible assets? 12. Define budget and budgetary control 13. Explain the various objectives of depreciation.
- 3. 14. Distinguish between a master budget and a functional budget Long Questions 1. Define financial accounting. Explain the process of accounting cycle in depth with an illustration 2. Mention the various adjustments to be made while preparing the final accounts 3. What is inventory? Explain the various methods of issuing material issues 4. Define depreciation. What are the various methods of calculating depreciation? 5. Explain the concept of budgeting and budgetary control. What are the essentials of an effective budgetary control system? 6. Explain the concept of budgetary control. What are its merits and demerits. How do you classify budgets? Exercises 1. The following are the balances extracted from Nalan on 31-12-1998 Rs. Capital 30,000 Drawings 5,000 Furniture & Fittngs 2,600 Bank Overdraft 4,200 Creditors 13,800 Business Premises 20,000 Sales Returns 2,000 Discounts (Debtors) 1,600 Discounts (Creditors) 2,000 Taxes & Insurance 2,000 Stock on 1-1-1998 22,000 Debtors 18,000 Rent from tenants 1,000 Purchases 1,10,000 Sales 1,50,000 General expenses 4,000 Salaries 9,000 Commission (Debtors) 2,200 Carriage on purchases 1,800 Bad debts written off 800 Adjustments (1) Stock on hand 31-12-1998 : Rs. 20,060 (2) Write off depreciation Business premises : Rs. 300, Furniture & fittings : Rs. 250
- 4. (3) Make provision for 5% on debtors for doubtful debts. (4) Allow interest on capital at 5%. (5) Carry forward Rs. 200 for unexpired insurance. 2. From the following Trial Balance of KRISHNAN as at 31-12-1987, you are required to prepare a Trading, Profit and Loss account for the year ended 31-12-1987 and Balance Sheet as at that date after making necessary adjustments. Rs. Rs. Capital 80,000 Drawings 6,000 Plant & Machinery (Balance on 1-1-87) 20,000 Plant & Machinery (Additional on 1-7-87) 5,000 Stock on 1-1-87 15,000 Purchases 82,000 Returns Inwards 1,000 Sundry debtors 20,000 Furniture & Fixtures 5,000 Freight & Duty 2,000 Carriage Outwards 500 Rent, Rates & taxes 4,600 Printing & Stationery 800 Trading expenses 400 Sundry Creditors 10,000 Discounts 800 Sales 1,20,000 Return Outwards 2,000 Posting & telegraph 800 Provision for debtors 400 Subrent for premises upto 30-6-87 1,200 Insurance charges 700 Salaries & Wages 21,300 Cash in hand 6,200 Cash in Bank 20,500 ---------------- ---------------- 2,13,400 2,13,400 --------------- ---------------- Adjustments: (1) Stock on 31-12-87 : Rs. 14,600 (2) Write off Rs. 600 as bad debts (3) Provision for doubtful debts is to be maintained at 5% on debtors (4) Create a provision for discount on debtors & reserves fro discount on creditors at 2%
- 5. (5) Provision for depreciation on Furniture and fixtures is at 5% per annum and Plant & Machinery at 20% per annum (6) Insurance prepaid was Rs. 100 A fire occurred on 25th December 1987 in the godown and stock of the value of Rs. 5,000 was destroyed. It was fully insured and insurance company admitted the claim in full 3. the following Trial Balance of LOVMOON Ltd. And other particulars given, prepare Trading, Profit and Loss account and Balance Sheet for the year ended 31-12-1995. Rs. Rs. Prepaid expenses 1,000 Share Capital 10,00,000 Balance at Bank 1,76,000 Sundry Creditors 2,32,000 Motor Vehicles 1,48,000 Sales 31,60,000 Sundry Debtors 2,96,000 Provision for Printing & Stationery 6,600 doubtful debts 5,000 Purchases 24,00,000 General reserve 2,00,000 Opening Stock 2,40,000 Last Year P&L Bad debts 11,400 A/c Balance 1,24,000 Freehold premises At cost 8,00,000 Repairs to premises 47,600 Mgr.’s Remuneration 20,000 Wages & Salaries 2,29,000 Motor & Delivery exp. 99,000 Administration exp. 1,31,400 Rates & taxes 15,000 Goodwill 1,00,000 ----------------- ------------------ 47,21,000 47,21,000 ---------------- ------------------ Adjustment: (1) Stock on hand 31-12-95 : Rs. 2,80,000 (2) Depreciation on Motor vehicles : Rs. 74,000 (3) Sundry creditors include a claim for damages : Rs. 20,000 made last year. This was settled during this year for Rs. 15,100 (4) Unpaid wages : Rs. 1,600 (5) Rates paid in advance : Rs. 3,000 (6) Provision for bad debts is to be reduced to Rs. 3,500 (7) The item of repairs to premises includes Rs. 20,000 for a new structure (8) Stock of stationery on hand : Rs. 2,200
- 6. 4. A company purchased a second hand machine on 1st Jan 2000 for Rs.37,000 and immediately spent Rs.2,000 on its repairs and Rs.1,000 on its installation. On 1st July 2001, it purchased another machine for Rs.10,000 and on 1st July 2002, it sold off the first machine purchased in 2000 at Rs.28,000. on the same date, it purchased machinery for Rs.25,000. The second machine purchased for Rs.10,000 was sold off on 1st July 2003 for Rs.2000. Depreciation was annually on 31st December provided on machinery @ 10% on the original cost. In 2001, however, the co changed the method of providing depreciation and adopted the Written down value method, the rate of depreciation being 15%. Give the machinery account for the 4 years commencing from 1st January 2000. Unit III Short Questions: 13. Define Accounting. What are its functions and limitations? 14. What are the objectives of financial statements? 15. Why is Accounting regarded as an aid to management? 16. Explain any three of the accounting concepts 17. What are Accounting Standards? What is the authority which is responsible for setting standards in India? 18. List out any 5 Accounting Standards 19. What are the advantages and disadvantages of Accounting Standards? 20. What are final accounts? What purpose do they serve? 21. Briefly explain the concept of inflation accounting. What are its merits and demerits? 22. What do you understand by Financial Statement Analysis? 23. Discuss the various objectives of Financial Statement Analysis 24. What are the various tools and techniques of Financial Statement Analysis 25. What is meant by Ratio Analysis? 26. What is the significance of Ratio analysis in Financial Statement Analysis? 27. What are the various categories of ratios? 28. What is a Funds Flow Statement? How is it prepared? 29. Explain the procedure of preparing the Funds Flow Statement 30. Distinguish between a Funds Flow Statement and a Cash Flow Statement 31. What is a Cash Flow Statement? 32. What are the objectives of Cash Flow Statement? Long Questions: 9. State the persons who will be interested in accounting information
- 7. 10. Discuss briefly the accounting concepts and conventions 11. Differentiate between (i) outstanding expenses and prepaid expenses (ii) Outstanding income and incomes received in advance (iii) interest on capital and interest on drawings 12. Write short notes on – (i) manufacturing account (ii) trading account (iii) profit and loss account and (iv) balance sheet. 13. Explain the various adjustments affecting the preparation of a balance sheet. 14. What do you mean by Financial Statement Analysis? Explain the various tools and techniques of Financial Statement Analysis in depth 15. What do you mean by a ratio? What are the merits and demerits of ratio analysis? 16. Explain in depth the various categories of ratios with their significance in analysis 17. What do you mean by Funds Flow Statement? What are its merits and demerits? 18. What is Cash Flow Statement? What are its merits? How is it useful to the manager in decision making? Final Accounts: (Exercises) 1. . From the following balance, prepare a Trial Balance of Shravan Kumar as on 31-3-1995. Rs. Capital 41,000 Sundry drawings 2,000 Machinery 20,000 Furniture 1,500 Cash at Bank 18,200 Cash at hand 750 Discount allowed 1,200 Sales 55,000 Freight Inwards 1,300 Insurance 800 Printing & Stationery 675 Rates and Taxes 1,100 Opening Stock 17,000 Debtors 38,000 Creditors 45,000 Purchases 30,000 Salaries 8,300 Sales returns 1,000 Purchase returns 925 Bills receivable 1,700 Bills payable 1,600 2. . From the following Trial Balance of Sunshine & Co., prepare Trading, Profit and Loss account and Balance Sheet as on 31-12-1995.
- 8. Rs. Rs. Plant & Machinery 13,000 Capital 25,000 Buildings 17,000 Loans 5,000 Receivables 9,650 Sales 35,000 Purchases 18,000 Accounts payable 4,000 Discount allowed 1,200 Bills payable 5,000 Wages 7,000 Purchase returns 2,000 Salaries 3,000 Dividends received 3,000 Travelling expenses 750 Freight 200 Insurance 300 Commission paid 100 Cash on hand 100 Bank 1,600 Repairs 500 Interest on loans 600 Opening inventory 6,000 ------------- ------------ 79,000 79,000 -------------- ------------ Adjustment: (1) Closing inventory : Rs. 8,000 (2) Depreciation on Plant & Machinery 15% and 10% on buildings (3) Provision for doubtful debts : Rs. 500 (4) Insurance prepaid : Rs. 50 (5) Outstanding rent : Rs. 100 3. following is the trial balance of XYZ Ltd as on 31st December 2005. Debit Balances Amount Credit Balances Amount Opening inventory 72,000 Capital 5,00,000 Purchases 2,25,000 Sales 3,50,000 Furniture 15,000 Purchase returns 1,800 Motor car 30,000 Creditors 32,000 Buildings 4,25,800 Commission 24,000 Debtors 50,000 7,500 Advertisement 22,000 Repairs and maintenance 13,000 General expenses 16,000 Insurance 7,000 Cash in hand 3,500 Cash at Bank 6,000
- 9. Salaries 30,000 9,15,300 9,15,300 You are required to prepare the trading account, Profit & Loss account and the Balance sheet as on 31st December 2005 after taking into account the following adjustments (i) Closing inventory as on 31st December 2005 is Rs.80,000 (ii) Interest on capital is @ 6% (iii) Prepaid advertisement expenditure is Rs.2,000 (iv) Goods used for domestic purposes is Rs.1,800 (v) Outstanding Salaries Rs.3,000 (vi) Depreciation on Buildings and Furniture at 5% and on Motor car at 10% 4. The following trial balance is extracted from the books of Mr.Pillai on 31.03.2002 PARTICULARS DEBIT CREDIT (Rs) (Rs) Furniture & Fittings 640 - Motor Vehicles 6,250 - Buildings 7,500 - Capital - 12,500 Bad debts 125 - Provision for doubtful debts - 200 Sundry debtors & Creditors 3,800 2,500 Stock as on 1.4.2002 3,460 - Purchases and Sales 5,415 15,540 Bank Overdraft - 2,850 Sales & Purchase returns’ 200 125 Advertising 450 - Interest on Bank overdraft 118 - Commission - 375 Cash 650 - Taxes & Insurance premium 782 General expenses 1,250 - Salaries 3,300 - TOTAL 34,000 34,000 Adjustments: 8) Stock on hand on 31.3.2002 Rs.3,250 9) Depreciate Buildings @5% pa, Furniture @ 10% pa, Motor Vehicles @ 20% pa 10) Rs.85 is due for interest on bank overdraft 11) Salaries Rs.300 and taxes Rs.200 are outstanding
- 10. 12) Insurance premium amounting to Rs.100 is prepaid 13) One third of the commission received is in respect of work to be done next year 14) Write off a further sum of Rs.100 as bad debts from debtors and create provision for doubtful debts @ 5% on debtors Prepare a trading and Profit & Loss account and Balance sheet of the company. Ratio Analysis: (Exercises) 1. From the following balance sheet, compute the following ratios (a) Current ratio (b) Liquid ratio (c) Absolute liquid ratio (d) Proprietary ratio (e) Asset to proprietary ratio (f) Debt equity ratio (g) Capital gearing ratio. LIABILITIES AMOUNT ASSETS AMOUNT Equity share capital 2,00,000 Plant & Machinery 2,00,000 10% Preference share capital 1,00,000 Land & Buildings 2,00,000 20% Debentures 1,00,000 Stock 1,50,000 Reserves & Surplus 1,00,000 Debtors 50,000 Long term loans 50,000 Cash 1,00,000 Creditors 1,00,000 Bank overdraft 50,000 ----------- ------------ 7,00,000 7,00,000 2. Find out the current liabilities from the following. Current ratio = 5.5 ; Quick ratio = 4 ; Inventory = 30,000 1. Following particulars pertaining to assets & liabilities of a company are given below LIABILITIES AMOUNT ASSETS AMOUNT 2,500 Equity shares of Rs.100 each fully paid up 2,50,000 Plant & Machinery 4,00,000 2,000 8% Preference shares of Land & Buildings 4,50,000 RS.100 each fully paid up 2,00,000 Stock-in-trade 1,50,000 3,000 9% Debentures of Sundry Debtors 1,00,000 Rs.100 each fully paid up 3,00,000 Cash & Bank balance 45,000 Reserves 2,00,000 Prepaid expenses 5 ,000 Current Liabilities 2,00,000 ------------ ------------- 11,50,000 11,50,000
- 11. Calculate (a) Debt equity ratio (b) Funded debt to total capitalisation (c) Proprietary ratio (d) Solvency ratio (e) Fixed assets to net worth ratio (f) Current assets to proprietor's funds ratio Funds Flow Analysis: (Exercises) 1. The following are the balance sheets of a limited company on 31st December 2002 and 2003. LIABILITIES 2002 (Rs) 2003 (Rs) Share capital 1,00,000 1,50,000 Premium on issue of shares - 5,000 General reserves 50,000 60,000 Profit and loss account 10,000 17,000 15% debentures 70,000 50,000 Accumulated depreciation 50,000 56,000 Sundry creditors 86,000 95,000 3,66,000 4,33,000 2002 (Rs) 2003 (Rs) ASSETS Freehold land 1,00,000 1,00,000 Plant at cost 1,04,000 1,04,000 Furniture at cost 7,000 9,000 Investments at cost 60,000 80,000 Debtors 30,000 70,000 Stock 35,000 Cash 30,000 29,000 41,000 3,66,000 4,33,000 During 2003, a machine that had been purchased for Rs.4,000 and on which Rs.2000 had been provided as depreciation was sold for Rs.1,000. You are required to prepare funds flow statement. 2. From the following Balance sheets of ABC Ltd as on 31st December 2004 and 2005, you are required to prepare a Schedule of Changes in the Working Capital and a Funds Flow Statement. Balance sheet of ABC Ltd Liabilities 31st Dec 31st Dec Assets 31st Dec 31st Dec ‘04 ‘05 ‘04 ‘05 Share capital 10,000 15,000 Fixed Assets 10,000 20,000 Provision for Tax 2,000 3,000 Current Assets 13,000 14,500 Trade Creditors 4,000 6,000 Proposed Dividends 1,000 1,500
- 12. Profit & Loss A/c 4,000 6,000 Outstanding Expenses 2,000 3,000 23,000 34,500 23,000 34,500 Additional Information: 1. Tax paid during 2005 is Rs.2,500 2. Dividends paid during 2005 is Rs.1,000 3. From the following Balance Sheets of X Ltd as on 31st December 2004 and 2005, you are required to prepare: (i) A Schedule of Changes in Working Capital (ii) A Funds Flow Statement Balance sheet of X Ltd Liabilities 31st Dec 31st Dec Assets 31st Dec 31st Dec ‘04 ‘05 ‘04 ‘05 Share capital 1,00,000 1,00,000 Land 48,000 96,000 General Reserve 14,000 18,000 Building and Provision for Tax 16,000 18,000 Equipment 3,60,000 5,76,000 Sundry Creditors 8,000 5,400Cash 60,000 72,000 Provision for Debtors 1,68,000 1,86,000 Doubtful debts 400 600 Stocks 2,64,000 96,000 Profit & Loss A/c 16,000 13,000 Advances 7,800 9,000 Bills Payable 1,200 800 1,55,600 1,55,800 1,55,600 1,55,800 Additional Information: Cost of equipment sold was Rs.72,000 4. Following are the comparative Balance Sheets of X Ltd for the years 2000 and 2001, you are required to prepare: (i) Statement of Changes in Working capital and (ii) Funds Flow Statement. Balance sheet of X Ltd Liabilities 31st Dec 31st Dec Assets 31st Dec 31st Dec ‘00 ‘01 ‘00 ‘01 Share Capital 70,000 74,000 Cash 9,000 7,800
- 13. Debentures 12,000 6,000 Debtors 14,900 17,700 Creditors 10,360 11,840 Stock 49,200 42,700 Profit & Loss A/c 10,740 11,360 Goodwill 10,000 5,000 Land 20,000 30,000 1,03,100 1,03,200 1,03,100 1,03,200 Additional information: (i) Dividends paid during the year Rs.4,000 (ii) Land was purchased during the year for Rs.15,000 Cash Flow Analysis (Exercises) 1. The statement of Financial position of Mr.Abhiram is as follows: Balance sheet of X Ltd Liabilities 31st Dec 31st Dec Assets 31st Dec 31st Dec ‘04 ‘05 ‘04 ‘05 Accounts payable 29,000 25,000 Cash 40,000 30,000 Capital 7,39,000 6,15,000 Debtors 20,000 17,000 Stock 8,000 13,000 Building 1,00,000 80,000 Other fixed assets 6,00,000 5,00,000 7,68,000 6,40,000 7,68,000 6,40,000 Additional information: (i) There were no drawings (ii) There were no purchases or sales of either building or other fixed assets. Prepare a Statement of Cash Flow. (Hint: When closing capital amount is less than the opening capital amount, and there are no drawings, the difference must be treated as the net loss incurred for the year). 2. The comparative Balance sheets of a company are given below: Comparative Balance sheets Liabilities 31st Dec 31st Dec Assets 31st Dec 31st Dec ‘04 ‘05 ‘04 ‘05
- 14. Share Capital 35,000 37,000 Cash 4,500 3,900 Debentures 6,000 3,000 Book Debts 7,450 8,850 Creditors 5,180 5,920 Stock 24,600 21,350 Provision for Land 10,000 15,000 Doubtful debts 350 400 Goodwill 5,000 2,500 Profit and Loss 5,020 5,280 51,550 51,600 51,550 51,600 Additional Information: 1. Dividends paid amounted to Rs.1,750 2. Land was purchased for Rs.5,000 and amount provided for the amortization of goodwill amounted to Rs.2,500 3. Debentures were repaid to the extent of Rs.3,000 You are required to prepare a Cash Flow Statement. 4. From the following Balance Sheets of ABC Ltd, prepare the Cash Flow Statement Balance sheet of X Ltd Liabilities 31st Dec 31st Dec Assets 31st Dec 31st Dec ‘04 ‘05 ‘04 ‘05 Equity Share Capital 3,00,000 4,00,000 Goodwill 1,15,000 90,000 Preference share Land & Buildings 2,00,000 1,70,000 capital 1,50,000 1,00,000 Plant 80,000 2,00,000 General reserve 40,000 70,000 Debtors 1,60,000 2,00,000 Profit & Loss A/c 30,000 48,000 Stock 77,000 1,09,000 Proposed Dividend 42,000 50,000 Bills Receivable 20,000 30,000 Creditors 55,000 83,000 Cash in hand 15,000 10,000 Bills Payable 20,000 16,000 Cash at Bank 10,000 8,000 Provision for Tax 40,000 50,000 6,77,000 8,17,000 6,77,000 8,17,000 Additional information: (i) Depreciation of Rs.10,000 and Rs.20,000 have been charged on Plant and Land and Buildings in 2005 (ii) An interim dividend of Rs.20,000 has been paid in 2005 (iii) Rs.35,000 Income tax was paid during 2005.
- 15. Unit -IV Short Questions 1. Define cost. What are the various systems of cost? 2. What is opportunity cost? 3. Write a brief note on target costing 4. Briefly explain the concept of activity based costing 5. Briefly explain the meaning of contribution 6. What are the managerial applications of break even analysis? 7. What does the term ‘break-even’ connote in the context of marketing ? 8. Non-variable expenses are not constant for all volumes and yet there are taken as constant. Explain. 9. As volume of sales increases, the sales revenue increases directly and proportionately. Is it always true ? Explain with examples. 10. What is a Cost-Volume Relationship Chart ? How can it be converted into a Profit graph ? 11. Define standard costing. What are its uses? 12. What is a variance? What are the various types of variances? 13. Distinguish between sales variance and profit variance Long Questions 1. How is break-even volume affected by changes (a) in non-variable costs (b)variable costs (c) price per un it (d) number of u its sold assuming that none of these changes affects any other element of B.E. Analysis. 2. Show how a change in one elements of B.E.Analysis can affect some other element. 3. What is meant by safety margin in the context of break-even volume ? What purpose does it serve ? How is absolute safety margin different from relative safety margin ? How are these determined ? 4. What is PV Ratio ? What is its use in break-even analysis ? 5. What is break even analysis? What are its merits and demerits? 6. Briefly explain the various elements of cost. 7. Briefly explain the process of variance analysis.
- 16. Unit -V Short Questions 15. What do you mean by relevant cost? 16. What are incremental decremental costs? 17. How do you make decisions regarding a special order? 18. Explain the concept of responsibility accounting 19. Define budget and budgetary control 20. Distinguish between a master budget and a functional budget Long Questions 1. Describe in depth the incremental costing method and explain the various decisions that can be taken with its help 2. Explain the decision making process for – special order decision, production constraint decisions, make or buy decisions 3. Write a note on responsibility accounting. 4. Explain the concept of budgeting and budgetary control. What are the essentials of an effective budgetary control system? 5. Explain the concept of budgetary control. What are its merits and demerits. How do you classify budgets? 1. Prepare a cash budget for the first four months from the following estimated revenues and expenses Month Sales Purchases Labor Overheads – Overheads – (Rs) (Rs) (Wages) Administrative Distribution Rs (Rs) (Rs) April 60,000 60,000 12,000 2,000 1,200 May 66,000 42,000 14,000 2,200 1,400 June 72,000 40,000 16,000 2,200 1,400 July 78,000 36,000 18,000 2,400 1,600 August 84,000 34,000 20,000 2,600 1,600 Additional information: I. Cash balance on 1st April was Rs.35,000 II. 50% of sales are on credit basis which are realized in the subsequent month III. Suppliers are paid in the month following the month of supply
- 17. IV. Delay in payment of wages and overheads is 30 days V. Dividends on investments amounting Rs 10,000 may be recd. in Apl & July The company plans to purchase a machine for Rs.60,000 for which it has to pay the consideration in three equal installments in the month of April, June and July. 2. A company produces and sells three items : A,B and C. the company has divided its market into 2 zones: Zone X and Zone Y. The actual figures for the previous year sales were as under: Zone X Zone Y Units Unit Price Units Unit Price Product A 4,00,000 12.00 2,50,000 12.00 Product B 2,50,000 15.00 3,50,000 15.00 Product C 3,00,000 16.00 3,00,000 16.00 For the current year, it is estimated that sale of A will go up by 10% in Zone B and of C by 25,000 units in Zone A. The company plans to introduce a publicity film for B in the TV. The budgeted figures for B are to be increased by 20% in both the zones. The prices of A and C are to maintained but for C, a bonus cut of Re.1 will be announced. You are required to prepare quantitative cum financial budget for sales in the current year.