Solved Management Accounting Question Papers

Gulbarga University, Gulbarga

Section – B

1. Ratio Analysis

Q1. Question Paper 2009

Sol: Calculation of Earnings per Share (EPS).

Earnings before Tax 5,00,000 Profit
EPS =
Less: Tax @ 40% (5,00,000 x 40 / 100) 2,00,000 No. of Equity Shares
Earning After Tax 3,00,000
Less: Dividend to Preferential Shareholders 40,000 2,60,000
=
(5,00,000 x 8 / 100) 50,000
Profit available to Equity Shareholders 2,60,000
= 5.20

Q2. Question Paper 2010

Sol: Calculation of Earnings per Share (EPS).

Earnings before Tax 75,000 Profit
EPS =
Less: Tax @ 40% (75,000 x 40 / 100) 30,000 No. of Equity Shares
Earning After Tax 45,000
Less: Dividend to Preferential Shareholders 8,000 37,000
=
(1,00,000 x 8 / 100) 20,000
Profit available to Equity Shareholders 37,000
= 1.85

Q3. Question Paper 2011

Sol:
1. Calculation of Average Creditors and Bills Payable:
Opening Bills Payable on 1-1-2008 26,000
Closing Bills Payable on 31-12-2008 20,000 46,000

Opening Creditors on 1-1-2008 40,000

Closing Creditors on 31-12-2008 60,000 1,00,000
1,46,000
Average Creditors = 1,46,000 / 2 = 73,000

2. Calculation of Credit Purchases

Total Purchases 4,00,000
Less: Cash Purchases 30,000
Purchase Returns 5,000 35,000
Credit Purchases 3,65,000

3. Calculation of Creditors turnover Ratio

Credit Purchases 3,65,000
Creditors turnover Ratio = =
Average Creditors 73,000
= 5 Times

4. Calculation of Average Payment Period

No. of Months in a Year 365
Debtors Payment Period = = = 73 Days
Creditors turnover Ratio 5

Q4. Question Paper 2011

Sol: Calculation of Earnings per Share (EPS).

Earnings before Interest and Tax 80,000 Profit
EPS =
Less: Interest on Debentures (1,00,000 x 8 / 100) 8,000 No. of Equity Shares
Earnings before Tax 72,000
Less: Tax @ 40% (72,000 x 40 / 100) 28,800 35,200
=
Earning After Tax 43,200 15,000
Less: Dividend to Preferential Shareholders 8,000
(80,000 x 10 / 100) = 2.35
Profit available to Equity Shareholders 35,200

Q5. Question Paper 2012, 2016

 Sol:
Current Assets Liquid Assets
a. Current Ratio = b. Liquid Ratio =
Current Liabilities Liquid Liabilities

Current Assets Liquid Assets

2 = 1.5 =
4,00,000 4,00,000

By cross multiplication, we will get By cross multiplication, we will get

Current Assets = 2 x Current Liabilities Liquid Assets = 1.5 x Current Liabilities

= 2 x 4,00,000 = 1.5 x 4,00,000
= 8,00,000 = 6,00,000

c. Calculation of Stock d. Calculation of Sales

Current Assets 8,00,000 Sales
Inventory turnover ratio =
Less: Liquid Assets 6,00,000 Average Stock
Stock 2,00,000
Sales
9 =
2,00,000
By cross multiplication, we will get
Sales = 9 x 2,00 000
= 18,00,000

Q6. Question Paper 2013

Sol:
Gross Profit
Gross Profit Ratio = x 100
Sales

Gross Profit 1,60,000 x 100

a. Sales = x 100 = = 6,40,000
Gross Profit Ratio 25

3 3
b. Sundry Debtors = Credit sales x = 6,40,000 x = 1,60,000
12 12

c. Debtors = Accounts Receivable – Bills Receivable

= 1,60,000 – 1,00,000
= 1,50,000
Q7. Question Paper 2014

Sol:
a. Calculation of Average Debtors and Bills Receivables
Opening Debtors 35,000 Opening Bills Receivables 48,000
Closing Debtors 44,500 Closing Bills Receivables 32,000
79,500 80,000

79,500 + 80,000
Average Debtors and Bills Receivables = = 79,750
2

b. Calculation of Net Credit Sales

Total Sales – Cash Sales = Net Credit Sales
8,00,000 – 1,60,000 = 6,40,000

Net Credit Sales 6,40,000

c. Debtors Turnover Ratio = =
Average Debtors and Bills Receivables 79,750
= 8.03 Times

No. of Days 365

d. Average collection Period = =
Debtors Turnover Ratio 8.03
= 45

Q8. Question Paper 2015

Sol:
1. Calculation of Average Debtors :
Opening Debtors = 25,000 60,000
Average Debtors = = 30,000
Closing Debtors = 35,000 2
60,000

2. Calculation of Net Credit Sales:

Total Sales – Cash Sales = Net Credit Sales
4,75,000 – 55,000 = 4,20,000

3. Debtors Turnover Ratio :

Net Credit Sates 4,20,000
= = 14 times
Average Debtors 30,000
 2. Fund Flow Statement

Q1. Question Paper 2009

Sol: Calculation of Fund from Operations

Net Profit 48,000
Add: Non-Operating Expenses:
Depreciation on Plant 10,000
Goodwill Written-Off 10,000
Provision for Taxation 8,000
Proposed Dividend 12,000 40,000
88,000
Less: Non-Operating Incomes:
Profit on sale of Building 10,000
Fund from Operation 78,000

Q2. Question Paper 2010

Sol: Calculation of Fund from Operations

Closing Profit & Loss A/c 1,40,000
Add: Non-Operating Expenses:
Depreciation on Plant 15,000
Goodwill Written-Off 10,000
Proposed Dividend 15,000
Provision for Taxation 8,000 48,000
1,,88,000
Less: Non-Operating Incomes:
Dividend Received 10,000
Profit on sale of Furniture 8,000
Opening Profit & Loss A/c 1,00,000 1,18,000
Fund from Operation 70,000
Q3. Question Paper 2011

Sol: Calculation of Fund from Operations

Closing Profit & Loss A/c 60,000
Add: Non-Operating Expenses:
Depreciation Charged 10,000
Goodwill Written-Off 10,000
Transfer to General Reserve 20,000
Provision for Taxation 30,000
Loss on Sale of Machinery 5,000 75,000
1,35,000
Less: Non-Operating Incomes:
Refund of Tax 3,000
Dividend received 10,000
Undervaluation of Opening Stock 10,000
Opening Profit & Loss A/c 10,000 33,000
Fund from Operation 1,02,000
Format
Statement Showing Fund from Operation
Net Profit or Net Loss as Per P&L A/c xxx
Add: Non-Operating Expenses xx
Overvaluation of Opening Stock xx
Undervaluation of Closing Stock xx xxx
xxx
Less: Non-Operating Incomes xx
Undervaluation of Opening Stock xx
Overvaluation of Closing Stock xx xxx
Fund from Operation xxx
Q4. Question Paper 2012

Sol: Sources : Sale of Machinery = Rs.20,000

Application : Purchase of Plant & Machinery = Rs.96,000
 Plant & Machinery Account
To Balance b/d 90,000 By sale of Machinery 20,000
To Cash (Purchases) 70,000 By Loss on Sale 4,000
To Cash (Purchases) (Bal. Fig.) 96,000 (30,000-6,000 = 24,000-20,000)
By Depreciation on sold Machinery 6,000
(30,000 – 34,000)
By Depreciation 26,000
(32,000 – 6,000)
By Balance c/d 2,00,000
2,56,000 2,56,000

Calculation of Loss on sale of Machinery Provision for Depreciation Account of Machinery

Cost of Machine Sold 30,000 To Machine A/c 6,000 By Balance b/d ---
Less: Depreciation (Bal. Fig.) 6,000 To Balance c/d (Bal. Fig.) 26,000 By P&L A/c (Depreciation 32,000
WDV of Machinery 24,000 for the year)
Less: Sales Value of
20,000 32,000 32,000
Machinery
Loss on sale of
4,000
Machinery

Q5. Question Paper 2013

Sol: Schedules of Changes in Working Capital

Increase in Decrease in
P.Y C.Y
Particulars Working Working
2011 2012
Capital Capital
A. Current Assets :-
Cash 30,000 10,000 --- 20,000
Debtors 70,000 1,40,000 70,000 ---
Stock 1,50,000 2,25,000 75,000 ---
Work-in-Progress 80,000 90,000 10,000 ---
Total 3,30,000 4,65,000
B. Current Liabilities :-
Tax Payable 77,000 43,000 34,000 ---
Creditors 96,000 1,92,000 --- 96,000
Interest 37,000 45,000 --- 8,000
Proposed Dividend 50,000 35,000 15,000 ---
Total 2,60,000 3,15,000
Working Capital (A - B) 70,000 1,50,000 2,04,000 1,24,000
Net Increase in Working Capital 80,000 --- --- 80,000
1,50,000 1,50.000 2,04,000 2,04,000
Q6. Question Paper 2014

Sol: Schedules of Changes in Working Capital

P.Y C.Y Increase in Decrease in
Particulars 31-12- 31-12- Working Working
2007 2008 Capital Capital
C. Current Assets :-
Stock 36,000 28,000 --- 8,000
Bank 16,000 36,000 20,000 ---
Cash 66,000 78,000 12,000 ---
Total 1,18,000 1,42,000
D. Current Liabilities :-
Creditors 18,000 10,000 8,000 ---
Bills Payable 47,000 70,000 --- 23,000
Total 65,000 80,000
Working Capital (A - B) 53,000 62,000 40,000 31,000
Net Increase in Working Capital 9,000 --- --- 9,000
62,000 62,000 40,000 40,000

Q7. Question Paper 2015

Sol: Schedules of Changes in Working Capital

Increase in Decrease in
P.Y C.Y
Particulars Working Working
2012 2013
Capital Capital
A. Current Assets :-
Cash 82,000 1,14,000 32,000 ---
Stock 36,000 28,000 --- 8,000
Total 1,18,000 1,42,000
B. Current Liabilities :-
Creditors 18,000 10,000 8,000 ---
Bills Payable 47,000 70,000 --- 23,000
Total 65,000 80,000
Working Capital (A - B) 53,000 62,000 40,000 31,000
Net Increase in Working Capital 9,000 --- --- 9,000
62,000 62,000 40,000 40,000
Q8. Question Paper 2016

Sol: Calculation of Fund from Operations

Net Profit 1,80,000
Add: Non-Operating Expenses:
Preliminary Expenses Written-off 9,000
Goodwill Written-Off 9,000
Transfer to General Reserve 10,000
Provision for Depreciation 12,000 40,000
2,20,000
Less: Non-Operating Incomes:
Opening Profit & Loss A/c 1,35,000
Fund from Operation 85,000
 3. Cash Flow Statement

Q1. Question Paper 2009

Sol: Calculation of Cash from Operations

Net Loss 12,000
Add: Non-Operating Incomes:
Profit on sale of Land 10,000
Income Tax Refund 7,000 17,000
29,000
Less: Non-Operating Expenses:
Depreciation 21,000
Loss on sale of Plant 3,000
Goodwill Written-Off 12,000
Proposed Dividend 3,000
Provision for Tax 1,500 40,500
Cash loss in Operation 11,500

Q2. Question Paper 2010

Sol: Calculation of Cash from Operations
Net Profit 35,000
Add: Non-Operating Expenses:
Depreciation 20,000
Loss on Sale of Plant 4,000
Patents Written-Off 5,000
Proposed Dividend 10,000 39,000
74,000
Less: Non-Operating Incomes:
Interest received 5,000
Profit on sale of Land 4,000
Dividend received 5,000 14,000
Cash from Operation 60,000

Question Paper 2011 “No Question was asked”

Q3. Question Paper 2012, 2015

Sol: Calculation of Cash from Operations

Particulars Amount
Closing Profit & Loss A/c 1,40,000
Add: Decrease in Current Assets :-
Bills Receivable (60,000 – 36,000) 24,000
Goodwill Written-off (60,000 – 56,000) 4,000
Increase in Current Liabilities :-
Creditors (90,000 – 60,000) 30,000
Increase in Depreciation (1,20,000 – 96,000) 24,000 82,000
2,22,000
Less: Increase in Current Assets :-
Debtors (78,000 – 60,000) 18,000
Prepaid Expenses (11,400 – 9,000) 2,400
Opening Profit & Loss A/c 1,20,000 1,40,400
Cash from Operation 81,600
Q4. Question Paper 2013

Sol:
Q5. Question Paper 2014

Sol: Calculation of Cash from Operations

Net Loss 20,000
Add: Non-Operating Incomes:
Profit on sale of Building 12,500
Income Tax Refund 7,500 20,000
40,000
Less: Non-Operating Expenses:
Depreciation 35,000
Loss on sale of Furniture 5,000
Goodwill Written-Off 20,000
Proposed Dividend 5,000
Provision for Tax 2,500 67,500
Cash loss in Operation 27,500

Q6. Question Paper 2016

Sol: Classification of Transactions

Operating Investment Financial Others
--- Purchased Land Dividend Paid ---
--- Equipment Sold Interest Paid ---
--- Dividend received on Shares --- ---