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Ignou MBA Solved Assignments
IGNOU MBA Solved Assignments

MS-04 Solved Assignment Accounting and Finance for Managers

Rs. 200.00

  • Version: July - Dec 2014

Solutions Available: Yes

Soft Copy: Yes

Q. Study the Accounting Information System being followed in your organization, Prepare a report on the functioning of this system and also give your views on how the system could be improved.
Answer. The accounting information system comprises the processes, procedures, and systems that capture accounting data from business processes; record the accounting data in the appropriate records; process the detailed accounting data by classifying, summarizing.......... Organizations typically have an information system strategy (ISS) that follows the organizational business strategy and determines the long-term information requirements of the business. The ISS strategy provides an “umbrella” for different information technologies......

Q. You are required to prepare the company’s Balance Sheet as on 31st March 2014, and its Profit and Loss Account for the year ended on the date, from the information provided and also making necessary assumptions wherever required. The under mentioned balances appeared in the books of Dingo Flour Mills Ltd, as on 31st March 2014......

Rs. Rs.
Share Capital (Authorized and Issued), 60,000 Shares of Rs.10 Each 6,00,000 Motor Vehicles 15,000
General Reserve 2,50,000 Furniture 5,000
Unclaimed Dividends 6,526 Stocks 1,72,058
Trade Creditors 36,858 Book Debts 2,23,380
Buildings 1,00,000 Investments 2,88,950
Purchases 5,00,903 Depreciation Reserve 71,000
Sales 9,83,947 Cash Balances 72,240
Manufacturing Expenses 3,59,000 Director’s Fees 1,800
Establishment 26,814 Interim Dividend 15,000
 General Charges 31,078 Interest 8,544
Machinery 2,00,000 Profit and lost account . 1st April 2013 (Cr.)  16,848
 Staff Provident Fund  37,500

Additional Information:-
a) The stock of wheat and flour on 31st March 2014 , were valued at Rs. 1,48,680.
b) Provide Rs. 10,000 for Depreciations of block, and Rs. 1,500 for the company’s contribution to the Staff Provident Fund.
c) Interest accrued on investment amounted to Rs. 2,750.
d) A claim of Rs. 2,500 for workmen’s compensation is being disputed by the company.
e) Establishment includes Rs. 6,000 paid to the Manager who is entitled to remuneration @ 5% of profit ascertained according to the companies Act, subject to a minimum of Rs. 10,000 p.a.

Q. Gattu Corporation makes a driveway sealing compound that it sells in 5 gallon cans for Rs. 50 Per can. Company’s sales personnel have estimated annual sales of 3,600 units divided among the quarters as follows:
First quarter: 1,000 units
Second quarter: 1,100 units
Third quarter: 800 units
Fourth quarter: 700 units
Operating capacity of the manufacturing facilities is 900 units per quarter. Production of more than 900 units requires additional costs. Production cost is Rs. 30 per unit and there would be a 20 percent increase in cost for units in excess of 900 per quarter. The production manager is evaluated on the cost of production, whereas the sales manager is evaluated on the basis of sales revenue. The sales manager claims that if he had only 900 units to sell in each of the first two quarters, the unsatisfied customers would switch to new products and sales in each of the last two quarters would be 50 units less than estimated.
You are required to prepare sales and production budgets to determine how production should be scheduled and to resolve the conflict between the sales and production managers.

Q. Kongo & Sons is considering two mutually exclusive projects. Both need a initial cash outlay of Rs. 10,000 each, and have a life of five years. Company’s required rate of return is 10 percent and pays tax at a 50 per cent rate. The projects are going to be depreciated on a straight line basis. The before taxes cash flows expected to be generated by the projects are as follows:

1 2 3 4 5
Project P (Rs.) 4,000  4,000 4,000 4,000 4,000
Project Q (Rs.) 6,000 3,000 2,000 5,000 5,000

Calculate for each project: 1) the payback (2) the average rate of return (3) the net present value and profitability index, and (4) the internal rate of return. Which project should be accepted and why?

Q. What do you mean by Financial Planning? What would be the consequences if there are no budgetary control systems?
Answer. Financial planning is about planning and organizing the future business activities of a firm. Planning is the managerial function that involves the selection, from amongst the various alternatives of future objectives, procedures, policies and programs.10 Financial planning determines the direction for future growth of the business........ Financial planning helps managers assess the impact of a particular strategy on their firm's financial position, its cash flows, its reported earnings, and its need for external financing.

Q. Explain briefly about the determinants of Capital Structure?
Answer. Today, companies can choose from a wide variety of financing instruments, ranging from traditional common equity and straight debt to more exotic instruments such as convertible preferred equity, convertible and commodity-linked debt, and many others. But the fundamental question in designing a company’s capital structure remains simply the choice between debt....... The capital structure decision is a continuous one and has to be taken whenever a firm needs additional finance. The factors to be considered whenever a capital structure decision is taken.......

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 July - Dec 2014 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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