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MS-04 Solved Assignment Accounting and Finance for Managers

Rs. 200.00

  • Version: 2016 July - Dec


Soft Copy: Yes

Q. Take an organization of your choice & find out how the Accounting Reports are prepared by them and how these reports are useful for managers while making decisions relating to the activities of a Business.

Answer......

2. Prepare the Cash Flow Statement for XYZ Ltd. for the year 2015-16 and analyze its cash flow position. Balance Sheet Of XYZ on 31st March

Liabilities & Equity

2016 (Rs. in Lakhs)

2015 (Rs. in lakhs)

Equity share capital

1100

1000

Reserves and surplus

400

200

P&L balance

270

250

L.T borrowing

600

500

Current liabilities

270

200

Provision of taxation

240

150

Proposed dividends

110

100

Total

2990

2400

Assets

   

Gross fixed assets

1500

1200

Less: Accumulated Dep.

780

600

Net Fixed Assets

720

600

Long Term Investments

500

400

Inventories

380

200

Debtors

240

160

Cash and Bank Balance

100

60

Loans & Advances

1050

980

Total

2990

2400

P & L Accounts for the year 2006 - 07 (as on 31st March 2016)

Income

Rs in Lakhs

Sales

2520

Other Income

304

Stock Adjustment

36

Total

2860

Expenditure

 

Raw Material Consumed

1430

Manufacturing Expenses

280

Administrative expenses

160

Selling & Distribution Expenses

130

Depreciation

180

Interest

110

Total

2290

Profit Before Tax (PBT)

570

Provision For Taxes

240

Profit After Tax (PAT)

330

P & L At The Beginning Of The Year

250

Profit Available For Appropriation

580

Transfer To Reserves

200

Proposed Dividends (incl. div. tax)

100

Balance Profit Carried To B/S

270

The following additional information has been provided regarding the firm:

(i) Current liabilities denote amount that is payable to suppliers.

(ii) Raw materials constitute 80% of the inventory balance of the firm.

(iii) Loans and advance include income tax paid Rs. 240 lakh (previous year Rs. 150 lakh)

(iv) During 2015-16 10 lakh of equity shares of Rs. 10 each were issued at par. Long-term loans raised during the year amounted to Rs. 160 lakh.

(v) The interest shown in the P&L account has actually been paid for in cash and other income is realized in cash.

Q. With the help of a suitable illustration, explain how the costs and volume influence profit of a business.

Answer......

Q.4. A Company is considering to replace an existing machine for which two suppliers have given quotation. Supplier A has proposed a machine costing Rs. 180 lakh that uses the existing boiler while supplier B has quoted for the machine Rs. 110 lakh but that requires modification in the existing energy supply system costing Rs. 30 lakh. The machines have a life of 10 years and can be sold for 5% and 10% of the original cost respectively for Suppliers A and B. The additional working capital requirement expressed as % of revenue are 20% and 25% respectively because of larger requirement of fuel for the machine from Supplier B. The details are condensed below:

 

Supplier A

Supplier B

Price Of Machine

180

135

Annual Cash Flows

   

Revenue

200

205

Operating Cost

150

155

Working Capital (% Of Revenue)

20%

25%

Salvage Value % Of Cost

20%

5%

The firm charges depreciation on SLM basis with zero book value and has a tax rate of 35% for all kinds of income. The cost of capital for the firm is 12%

Which of the suppliers should the company prefer?

(a) as per NPV rule

(b) as per IRR rule.

Answer. .....

Q. How would you judge the efficiency of the management of working capital in a business enterprise? Explain with the help of hypothetical data

MS-04 Solved Assignment - IGNOU MBA

This page is dedicated to IGNOU Master of Business Administration (MBA) MS-04 Accounting and Finance for Managers Solved Assignment. You can download IGNOU MBA MS 4 Solved Assignments of 2016 July - Dec here.

Old Sample Answer

Q. What do you understand by Revenue Expenditure?
Answer. Revenue expenditure is the day-to-day expenditure that the organisation incurs as it goes about its business of producing and selling goods and services. Revenue expenses include materials, heating, lighting, admin and management salaries, stationery, photocopying, etc. They are the daily costs of doing business and are charged.......... Revenue expenditure usually has the following characteristics: It is the consequence of earlier capital acquisitions, It is short term, It is usually funded out of day-to-day revenue. As revenue costs do not form part of the fixed asset cost, they are expensed in the income statement in the period in which they are incurred........

Q. What do you understand by Capital Expenditure?
Answer. Capital expenditure is about spending money on long-term assets. Long-term assets could be things like plant, machinery and equipment. Capital expenditure could also be about developing products and brands that deliver a long-term return...... The main form of capital expenditure is on items used in the business over a long period of time for example, buildings, furniture, and equipment. These are usually referred to as long-term assets. Long-term assets may be tangible assets, such as those named above, or intangible assets such as investments in patents, copyrights...... Plans for capital expenditure must take into account how limited cash is today as well as 'the time value of money'. Constructing a capital expenditure plan requires us to produce a model of the cash flows associated with........


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