Nokia Product Life Cycle

Instructions:
1. Attempt all questions. 2. Make suitable assumptions wherever necessary. 3. Figures to the right indicate full marks. Q.1 (a) “Financial Statements are the most important part of financial reporting” 07 Discuss the above statement giving the objectives of financial statement and the contents of the various components of the financial statements. (b) From the following trial balance of Mr. A prepare a Trading, Profit & 07 Loss Account and Balance Sheet for the year ended on 31st March, 2004. Trial Balance as on 31-03-04 (Rs. In ‘000) Dr. Cr. Purchases 21,750 Discount allowed 1,300 Wages 6,500 Sales 30,000 Salaries 2,000 Travelling Expenses 400 Commission 425 Carriage inwards 275 Administration expenses 105 Printing exp. 600 Interest 250 Building 5,000 Furniture 200 Debtors 4,250 Capital 13,000 Creditors 2,100 Cash 2,045 45,100 45,100 Stock on 31-03-2004 was Rs, 60,00,000. (a) Discuss the WDV and SLM methods of depreciation. Also mention the 07 major provisions of the Income Tax Act regarding depreciation. (b) “As per the revised Accounting Standard – 2 issued by ICAI, FIFO & 07 WAC methods are recognized methods for inventory valuation”. Explain the FIFO & WAC methods of inventory valuation. OR (b) A company purchased raw materials during the month of March 2007 as 07 stated below : March 2, 1,600 units @ Rs. 60 per unit 8, 2,400 units @ Rs. 55 per unit 11, 5,000 units @ Rs. 57 per unit 19, 6,000 units @ Rs. 54 per unit 23, 3,000 units @ Rs. 58 per unit 30, 2,000 units @ Rs. 63 per unit While preparing final accounts on 31st March 2007 the company had  2,600 units of raw materials in its godown. You are required to calculate the values of closing stock of raw materials according to (a) First-In-First-Out Method (b) Last-In-First-Out Method (c) Weighted Average Method Q.3 (a) Briefly explain the meaning and significance of Cash Flow Statement and also the benefits to the users of Cash Flow Statement. (b) ABC Co. provides you with this Profit and Loss Account and Balance Sheet for the previous two years. The directors are interested in tracking down the activities that generated cash inflows during the year ending 31st March, 2005. Prepare a Cash Flow Statement based upon the following details. ABC Co. Balance Sheet as at 31st March, 2005 (Rs. in ‘000) ASSETS 2004 2005 Land 4,00,000 5,00,000 Investments 2,00,000 -Machinery 1,50,000 3,00,000 Cash in Hand 41,000 2,00,000 7,91,000 10,00,000 LIABILITIES 2004 2005 Equity share capital 2,50,000 5,00,000 Preference share capital 50,000 20,000 Debentures 1,00,000 40,000 Long-term borrowing -30,000 Net Profit 1,00,000 1,19,000 Reserves and surplus 2,91,000 2,91,000 7,91,000 10,00,000 ABC Co. Profit and Loss account for the year ending 31st March, 2005 (Rs. in ‘000) To Purchase (Cash) 15,000 By Sales (Cash) 30,000 To salaries & wages 5,000 By Interest Received 10,000 To Income Tax 1,000 By Dividend Income 15,000 To Debenture Interest 6,000 To Div. (Pref. Share) 3,000 To Div. (Equity Share) 6,000 To Net Profit 19,000 55,000 55,000 OR (a) “Auditors report and Directors report are mandated by Companies Act” – Discuss the significance and implication of Auditors report. (b) The following ledger balances were extracted from the books of VXL as on 31st March 2006. Land and Building Rs. 2,00,000, 12% debentures Rs. 2,00,000, share capital Rs. 10,00,000 (equity shares of Rs. 10 each fully paid up) Plant and Machinery Rs. 8,00,000, Goodwill Rs. 2,00,000, Investment in shares of R Ltd. Rs. 2,00,000, General Reserve Rs. 2,00,000, Stock in trade Rs. 1,00,000, Bill receivable Rs. 1,00,000, Debtors Rs. 1,50,000, Creditors Rs. 1,00,000, Bank loans (Unsecured) Rs. 1,00,000, Provision for taxation Rs. 55,000, Discount on issue of 12% debentures Rs. 5,000, 07 07

Q.3

07 07

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Proposed dividends Rs. 1,00,000. You are required to prepare the Balance Sheet of company as per Schedule-VI Part-I of the Companies Act-1956. Q.4 (a) “It is prudent to confirm the findings of Horizontal Analysis, by using 07 Trend Analysis”. Do you agree with above statement ? Why ? (b) Following are the Balance Sheets of BKC Ltd. for the year ended 07 December 2006 and 2007. ASSETS 2006 2007 Fixed Assets (Net) 1,20,000 1,75,000 Stock 20,000 25,000 Debtors 50,000 62,500 Bills receivable 10,000 30,000 Prepaid expense 5,000 6,000 Cash at Bank 20,000 26,500 Cash in Hand 5,000 15,000 2,30,000 3,40,000 LIABILITIES 2006 2007 Equity capital 1,00,000 1,65,000 Pref. Capital 50,000 75,000 Reserves 10,000 15,000 P & L A/c 7,500 10,000 Bank O.D. 25,000 25,000 Creditors 20,000 25,000 Provision for Taxation 10,000 12,500 Proposed dividend 7,500 12,500 2,30,000 3,40,000 Prepare a Common-size Balance Sheet and interpret the same OR

Q.4

(a) Give the major ratios which help in analyzing the profitability and 07 liquidity position of a firm. (b) Total current liabilities are Rs. 80,000 current ratio is 2.5:1. Acid test 07 ratio 1.5:1. Total current assets include stock, debtors and cash only. Cash is 2/3 of debtors. Calculate debtors & cash. (a) Define Human Resource Accounting giving its objectives and advantages. (b) Explain Responsibility Accounting giving the various types of responsibility centres. OR (a) Write a short note on – Relevance of Environmental Accounting. (b) “Due to globalization of economies, it is imperative to have uniform global financial reporting” – Discuss giving the significance of IFRS. *************