QP CODE: 21101153 Reg No : .....................

21101153 Name : .....................

B.COM DEGREE (CBCS) EXAMINATION, APRIL 2021

Sixth Semester
CORE - CO6CRT20 - MANAGEMENT ACCOUNTING
Common for B.Com Model I Finance & Taxation, B.Com Model I Co-operation, B.Com Model I Computer
Applications, B.Com Model I Marketing, B.Com Model I Travel & Tourism, B.Com Model III Computer
Applications, B.Com Model III Office Management & Secretarial Practice, B.Com Model III Taxation, B.Com
Model III Travel & Tourism, B.Com Model II Computer Applications, B.Com Model II Finance & Taxation,
B.Com Model II Logistics Management, B.Com Model II Marketing & B.Com Model II Travel & Tourism
2017 Admission Onwards
3373CDF9
Time: 3 Hours Max. Marks : 80
Instructions to Private candidates only: This question paper contains two sections. Answer SECTION I questions in the
answer-book provided. SECTION II, Internal examination questions must be answered in the question paper itself. Follow
the detailed instructions given under SECTION II
SECTION I

Part A
Answer any ten questions.
Each question carries 2 marks.

1. Define Management Accounting.

2. What is meant by Responsilibity Accounting?

3. Write a short note on Financial Statement Analysis.

4. Write a short note on vertical analysis.

5. Define Ratio Analysis.

6. What is Fixed Assets to Properitor's Fund Ratio?

Inventory turnover ratio is 2.5 times. Average Inventory is Rs. 20,000. Calculate cost of revenue for
7.
operations and Revenue from operations, if profit earned is 25% of cost.

8. What is Return on Shareholders fund?

9. Compute Funds from Operations: Profit after tax: Rs. 2, 63,000, Provision for Tax: Rs. 1,15,000,
Profit on sale of machinery: Rs. 25,000, Depreciation Rs.75, 500, Interest on investment: Rs.50,000.

10. How will you treat proposed dividend while preparing the Funds Flow Statement.

11. What is meant by Cash Ouflow ? Give an example.

Calculate Cash from Operations from the following information :

12.

Net Profit Rs.3,20,000

Opening Stock Rs.60,000
Closing Stock Rs.80,000
(10×2=20)

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 Part B
Answer any six questions.
Each question carries 5 marks.

13. How does Management Accounting differ from Cost Accounting?

14. Explain the different types of Financial Statements.

15. Prepare a Common Size Statement of Profit and Loss of H Ltd from the following information.
Particulars 31-03-2019
Revenue From Operations 4,00,000
Cost of materials consumed 1,82,000
Employee Benefit Expenses 42,000
Depreciation 24,000
5 % of Revenue
Other Expenses
from operations
Other Income 1,200
Income Tax 50%

16. Examine the relationship between Solvency, Liquidity and Profitability.

17. Calculate the value of Current Asset, Liquid assets and Stock in Trade. Given, Current Ratio is
2.25:1, Quick Ratio: 1.25:1 and Current liabilities is Rs.30,000.

18. What is 'Funds Flow Statement'? Examine its managerial uses.

Prepare a Statement of Changes in Working Capital from the Balance Sheet given below;
19.
2018 2019
Capital and Liabilities:
Share Capital 3,00,000 3,75,000
Trade Creditors 1,06,000 70,000
Profit and Loss Account 14,000 31,000
Total Liabilities 4,20,000 4,76,000
Assets:
Machinery 70,000 1,00,000
Stock-in- trade 1,21,000 1,36,000
Debtors 1,81,000 1,70,000
Cash 48,000 70,000
Total Assets 4,20,000 4,76,000

From the following information, find out Cash Flow from Investing Activities
20.
PARTICULARS CLOSING OPENING
BALANCE BALANCE (Rs.)
(Rs.)

Machinery at Cost 4,20,000 4,00,000

Accumulated Depreciation 1,10,000 1,00,000
Patents 1,60,000 2,80,00

Additional Information:

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 1. During the year, a machine costing Rs.40,000 with its accumulated depreciation of
Rs.24,000 was sold for Rs.20,000.
2. Patents were written off to the extent of Rs.40,000 and some patents were sold at a profit
of Rs.20,000.

From the following information, calculate Cash Flow from Financing Activities:
21.
Particulars 31st March 2020 31st March 2019
(Rs.) (Rs.)
Equity Share Capital 5,00,000 4,00,000
10% Debentures 1,00,000 1,50,000
Securities Premium Reserve 50,000 40,000
Bank Overdraft 2,00,000 1,50,000
Interest on Bank Overdraft 15,000 10,000

Additional Information : Interest Paid on Debentures Rs.10,000.

(6×5=30)
Part C
Answer any two questions.
Each question carries 15 marks.

22. From the following Balance Sheets of Lavender Ltd as at 31 st March 2018 and 2019, prepare a
Comparative Balance Sheet.
31-03-2018 31-03-2019
I. Equity and Liabilities:
1. Share Holder's Fund
a) Share Capital 5,00,000 10,00,000
b) Profit and Loss Account 2,50,000 8,60,000
2. Non-Current Liabilities
a) Long- Term Borrowings 2,00,000 1,50,000
b) Long -Term Provisions 50,000 60,000
3. Current Liabilities
a) Income Tax Payable 15,000 20,000
b) Trade Creditors 40,000 30,000
Total 10,55,000 21,20,000
II. Assets:
1. Non-Current Assets
a) Fixed: Tangible Assets
i) Buildings and Equipment 7,00,000 15,00,000
ii) Long Term Loans and
3,00,000 4,00,000
Advances
2. Current Assets
a) Stock 10,000 50,000
b) Debtors 16,000 59,000
c) Sundry Advances 14,000 21,000
d) Cash 15,000 90,000
Total 10,55,000 21,20,000

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23. From the following Balance Sheets of Samba Ltd. at 31st March 2019 and 31st March 2018, prepare
the Cash Flow Statement:
Particulars Note No. 31st March 2019 (Rs.) 31st March 2018 (Rs.)
I. EQUITY AND LIABILITIES
1. Shareholder’s Funds
(a) Share Capital 1 7,50,000 7,50,000
(b) Reserves and Surplus 2 3,10,000 (20,000)
2. Non - Current Liabilities
Long Term Borrowings (8% Debentures) 2,60,000 1,50,000
3. Current Liabilities
(a) 8% Bank Loan 40,000 50,000
(b)Trade Payables 1,20,000 1,10,000
(c) Short Term Provisions 3 50,000 40,000

TOTAL 15,30,000 10,80,000

II. ASSETS
1. Non- Current Assets
(a) Fixed Assets
(i) Tangible Assets (Net) 8,60,000 6,20,000
(ii) Intangible Assets (Goodwill) 15,000 40,000
(b) Non- Current Investments 1,25,000 80,000
2. Current Assets
(a) Current Investments 5,000 15,000
(b) Inventories 1,95,000 1,00,000
(c) Trade Receivables 2,00,000 2,00,000
(d) Cash and Cash Equivalents 1,30,000 25,000

TOTAL 15,30,000 10,80,000

Notes to Accounts

Particulars 31st March 2019 (Rs) 31st March 2018 (Rs)

1. Share Capital
Equity Share Capital 5,50,000 4,50,000
10% Preference Share Capital 2,00,000 3,00,000
7,50,000 7,50,000
2. Reserves and Surplus
Securities Premium Reserve 10,000 ….
General Reserve 1,50,000 1,20,000
Surplus a/c 1,50,000 (1,40,000)
3,10,000 (20,000)
3. Short - Term Provisions
Provision for Tax 50,000 50,000

Additional Information:

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 1. During the year a piece of machinery costing Rs.60,000 on which depreciation was charged
was Rs.20,000 was sold at 50 % of its book value. Depreciation provided on tangible assets
was Rs.60,000
2. Income Tax Rs.45,000 was provided.
3. At the end of the year Preference shares were redeemed at a premium of 5 %.
4. Additional Debentures were issued at par on 1st October 2018 and Bank loan was repaid
on the same date.

24. From the following balance sheets given below, you are required to prepare Funds Flow Statement.
31-12- 31-12-
2018 2019
I. Equity and Liabilities:
1. Share Holder's Fund
a) Share Capital 1,10,000 1,50,000
b) Reserves and Surplus
General Reserves 4,000 4,000
Profit and Loss Account 2,000 2,400
2) Non- Current Liabilities
a) 9% Debentures 12,000 14,000
b) Long Term Provisions
c) Provision for Taxation 6,000 8,400
3) Current Liabilities
a) Trade Creditors 49,000 35,600
b) Proposed Dividend 10,000 11,600
Total Liabilities 1,93,000 2,26,000
II. Assets:
1. Non-Current Assets
a) Fixed: Tangible Assets
i)Land and Building 60,000 50,000
ii) Plant and Machinery 30,000 50,000
2. Current Assets
i) Stock 60,000 70,000
ii) Debtors 40,000 48,000
iii) Bank 2,400 7,000
iv) Cash 600 1,000
Total Assets 1,93,000 2,26,000

25. Given:

Receivables Turnover 4
Payables Turnover 6
Inventory Turnover 8
Capital Turnover Ratio 2 Times
Fixed Assets Turnover Ratio 8 Times
Gross Profit Ratio 25%
Gross Profit during the year amounted to Rs. 80,000. There is no long term loan or overdraft.

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Reserves and surplus amount to Rs. 28,000. Ending inventory of the year is Rs. 2,000 above the
beginning inventory. Notes receivable amount to Rs. 5,000 and notes payable are Rs. 2,000.
Prepare a Balance Sheet on the basis of the information given above.

(2×15=30)

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QP Code: 21101153

SCHEME
Sixth Semester B.Com (CBCS) Degree Examination, April 2021

Course Course - CO6CRT20 - MANAGEMENT ACCOUNTING

PART A
1. Define Management Accounting
● Management accounting is a branch of accounting which is concerned with accounting
information useful for management.
● According to CIMA, London, “Management accounting is the application of professional
knowledge and skill in the preparation of accounting information in such a way as to
assist management in formation of policies and in the planning and control of
operations of the undertaking”.
2. What is meant by Responsibility Accounting?
● Responsibility accounting is a system of management accounting under which
accountability is established according to responsibility delegated to various levels.
3. Write short note on Financial Statement Analysis
● Financial statement analysis is the process of determining the significant operating and
financial characteristics of a firm from accounting data.
4. What is Vertical Analysis?
● It is also known as static analysis
● When ratios are calculated from the items of income statement or Balance Sheet of one
year, it is called vertical analysis.
5. Define Ratio Analysis
Ratio analysis is the analysis of financial statements with the help of ratios.
It includes comparison and interpretation of the ratios and their use for future projections.
6. What is Fixed Assets to Proprietors Ratio?
● The ratio shows the relationship between fixed assets and shareholders’ funds.
● The purpose of this ratio is to find out the proportion of owners fund invested in fixed
assets.
Fixed assets to Proprietors Ratio = Fixed assets
Shareholders’ fund.
7. Inventory turnover ratio is 2.5 times. Average inventory is 20000. Calculate cost of
revenue for operations and revenue from operations, if profit earned is 25% of cost.
Inventory Turnover Ratio = Cost of Revenue from Operations
Average inventory
i.e 2.5 = Cost of goods sold
20000
Cost of goods sold = 50000.
Profit = 50000 x 25% =12500.
Revenue from operations = 50000+12500= 62500
8. What is return on shareholders fund?
● This ratio shows the rate of profit on shareholders’ fund.
● It relates the profit available for shareholders on their total investment.

Return on shareholders’ fund = Net Profit (after interest and tax)

Shareholders’ fund

9. Calculate fund from operations. Profit after tax Rs. 2, 63,000. Provision for tax
Rs.1,15,000. Profit on sale of machinery Rs.25,000. Depreciation Rs. 75, 500. Interest on
investment Rs.50000.

Calculation of Fund from Operation

Particulars Amount Amount

Profit after tax 263000
Add: Provision for tax 115000
Depreciation 75500 190500
453500
Less: Interest on investments 50000
Profit on sale of machinery 25000 75000
Fund from operation 378500

10. How will you treat proposed dividend while preparing fund flow statements?
● According to circumstances of each case, proposed dividend may be treated as non-
current liability or current liability.
● If it is treated as a non-current liability, then separate ledger account is opened.
● If it is treated as current liability, it is shown in schedule of changes in working capital.
11. What is meant by cash outflow. Give an example.
● It is the amount of cash that a business disburses.
● Example- Cash payments to suppliers.
12. Calculate cash from operations from the following information:
Net profit Rs. 320000
Opening stock Rs. 50000
Closing stock Rs. 80000

Calculation of Cash from operations

Net profit 320000
Adjustments for non-cash non-operating activities :
Increase in current asset (30000)
Net cash from Operations 290000
=======
 PART B
13. How does Management Accounting differ from Cost Accounting?
Basis Cost accounting Management accounting
Meaning For ascertaining the cost of a It is concerned with accounting
product or rendering service information useful to management
Objective It is to record the cost of It is meant for helping the management
producing a product or providing in formulating policies and plans.
service
Scope The scope is narrow and it deals Scope is wide which includes financial
primarily with cost accounting, cost accounting, budgeting,
ascertainment tax planning etc.
Principles Certain principles and policies No specific principles are followed
are followed
Data used Only those transactions which It uses both quantitative and
can be expressed in figures are qualitative information
considered
Nature It uses mainly past and present Generally concerned with projections
figures of figures for the future.
Auditing Cost accounts are to be audited No compulsory audit in management
compulsorily in certain industries accounting.

14. Explain different types of financial statements

● Profit and loss account (Income statement)- It is prepared to determine the operational
position of the concern. It is s statement of revenues earned and expenses incurred for
earning the revenue
● Balance sheet (Position statement)- Balance sheet shows all the assets owned by the
concern and all liabilities and claims owed to owners and outsiders.
● Cash flow statement- it is an analytical statement prepared to study the impact of business
transactions of a particular period on the most liquid form of assets namely, cash and cash
equivalents.
● Fund flow statements- It is a statement which shows the movement of funds, indicating the
various means by which funds are obtained during a particular period and also the ways in
which these funds are employed.

15. Prepare a common size statement of Profit and Loss of H Ltd from the following
information:

Particulars 31.03.2019
Revenue from operations 400000
Cost of materials consumed 182000
Employee benefit expenses 42000
Depreciation 24000
Other expenses 5 % of revenue from operations
Other income 1200
Income tax 50%
 H LTD
Common Size Statement
Particulars Note No Amount Percentage
I. Revenue from Operations 400000 100.0
II. Other Income 1200 0.30
III. Total Revenue 401200 100.3
IV. Expenses:-
Cost of Materials Consumed 182000 45.5
Employee Benefit Expense 42000 10.5
Depreciation 24000 6.0
Other Expenses 20000 5.0
Total expenses 268000 67.0
V. Profit Before Tax 133200 33.33
Less: Tax 66600 16.7
Profit after Tax 66600 16.7

16. Examine the relationship between Solvency, Liquidity and Profitability

● Liquidity ratio is the ratio that describes the company’s ability to meet short-term
liabilities.
● Solvency ratio describes the company’s ability to meet long-term obligations
● Profitability ratios measures company’s ability to generate profits.
17. Calculate the value of current assets, liquid assets and stock in trade. Given current ratio
is 2.25, quick ratio 1.25 and current liabilities is Rs. 30000.
Current ratio = Current Assets
Current Liability
2.25 = Current Asset
30000 Current asset = 67500.
Quick ratio = Liquid assets
Current Liability
1.25 = Liquid assets
30000 Liquid asset = 37500.
Stock = Current asset – liquid asset = 67500- 37500 = 30000

18. What is fund flow statement? Examine its managerial uses.

● It is a statement which shows the movement of funds, indicating the various means by
which funds are obtained during a particular period and also the ways in which these
funds are employed.
● Uses of fund flow statement:-
1. Provides a detailed analysis
2. Shows sources and uses of funds
3. Helps in computation of cost of capital
4. Acts as a future guide
5. Basis for future capital expenditure decisions
6. Indication of weakness or strength
7. Throws light on consequences of business operations
8. Budget comparison
9. Helps in proper allocation of resources
10. Helps in formulation of policies
19. Prepare a statement of changes in working capital form the balance sheet given below:
Particulars 2018 2019
Capital and liabilities:
Share capital 300000 375000
Trade creditors 106000 70000
Profit and loss account 14000 31000
Total liabilities 420000 476000
Assets:
Machinery 70000 100000
Stock-in-trade 121000 136000
Debtors 181000 170000
Cash 48000 70000
Total Assets 420000 476000

Answer
Statement of Changes in Working Capital
Particulars Previous year Current year Effect on working capital
Increase Decrease
A. Current Assets
Stock-in-trade 121000 136000 15000
Debtors 181000 170000 11000
Cash 48000 70000 22000
Total A 350000 376000
B. Current Liabilities
Trade creditors 106000 70000 36000
Total B 106000 70000
C. Working capital (A-B) 244000 306000 73000 11000
Net Increase in Working Capital 62000 62000
Total 306000 306000 73000 73000

20. From the following information, find out Cash Flow from Investing activities (Value
liberally)

Particulars Closing Balance Opening Balance

Machinery on cost 420000 400000
Accumulated depreciation 110000 100000
Patents 160000 280000
1. During the year, a machine costing Rs.40000 with its accumulated depreciation of Rs.24000
was sold for Rs.20000.
2. Patents were written off to the extent of 40000 and some patents were sold at a profit of
Rs.20000.
Cash flow from investing activity:
Purchase of machinery (60000)
Sale of machinery 20000
Sale of patent 100000
Cash flow from investing activity 60000
 Machinery Account
Particulars Amount Particulars Amount
Balance b/d 400000 Cash 20000
Profit and loss 4000 Accumulated 24000
Cash (purchase) 60000 depreciation 420000
Balance c/d
464000 464000
Patents Account
Particulars Amount Particulars Amount
Balance b/d *280000 Cash (bf) 100000
Profit and loss 20000 Profit & Loss A/c 40000
(written off)
Balance c/d 160000
300000 300000

21. Cash Flow from Financing Activity

Issue of shares 100000
Redemption of debentures (50000)
Interest paid (10000)
Bank OD 50000
Cash received from premium on issue of shares 10000
100000
Here Rs.5000 interest on Bank OD is treated as outstanding expense.
 PART C
22
Comparative Balance Sheet for the year ended 31st March 2018 and 2019.

Increase/ Increase /
Particulars 2018 2019 Decrease Decrease
Rs. %
Equity and liabilities:
1. Shareholders fund
a. Share capital 500000 1000000 500000 100
b. Profit and loss a/c 250000 860000 610000 244
Total 750000 1860000 1110000 148
Non-current Liabilities
a. Long term borrowings 200000 150000 (50000) (25)
b. Long term provisions 50000 60000 10000 20
Total 250000 210000 (40000) (16)
Current liabilities
a. Income tax 15000 20000 5000 33.3
b. Trade creditors 40000 30000 (10000) (25)
Total 55000 50000 (5000) (9.09)
TOTAL 1055000 2120000 1065000 100.9
Assets:
Non-current assets:
Tangible assets
a. Building and equipment 700000 1500000 800000 11402
b. Long term loans and advances 300000 400000 100000 33.33
Total 1000000 1900000 900000 90
Current Assets
a. Stock 10000 50000 40000 400
b. Debtors 16000 59000 43000 268.75
c. Sundry advances 14000 21000 7000 50
d. Cash 15000 90000 75000 500
Total 55000 220000 165000 300
TOTAL 1055000 2120000 1065000 100.9
23) CASH FLOW STATEMENT
for the year ended 31st March 2019
Particulars Rs. Rs.
A. A. Cash Flow from Operating Activities:
B. Closing Balance of Surplus Account 150000
C. Less: Opening Balance of Surplus Account (140000)
Current Year Profit 290000
D. Add : Transfer to Reserve (150000 -120000) 30000
E. : Tax Provision made 45000
F. : Interest on Bank Loan (Working Note 1 ) 3600
G. : Debenture Interest Paid (Working Note 2 ) 16400
H. : Loss on Sale of Tangible Asset (Working Note 3 ) 20000
I. : Amortization of Goodwill (40000-15000) 25000
J. : Premium on Redemption of Preference Shares (10000 X 5%) 5000
K. : Depreciation on Tangible Asset 60000
Net Profit before Working Capital Changes 495000
Less: Increase in Inventories (95000)
L. Add: Increase in Trade Payables 10000
Add: Decrease in Investment 10000
Cash Generated from Operations 420000
Less: Income Tax Paid (Working Note 4 ) (35000)
A. Net Cash used in Operating Activities 385000

B. Cash Flow from Investing Activities:

M. : Sale of Tangible Assets 20000
N. : Purchase of Tangible Assets (340000)
O. : Purchase of Investments (125000-80000) (45000)
B. Cash Flow from Investing Activities (365000)
P.
C. Cash Flow from Financing Activities:
Q. : Issue of Share Capital (550000-450000) 100000
R. : Redemption of Preference Shares at Premium of 5% ( 100000X105%) (105000)
S. : Debentures Issued 110000
T. : Debenture Interest Paid (Working Note 2 ) (16400)
U. : Bank Loan Repaid (10000)
V. : Interest on Bank Loan Paid (Working Note 1 ) (3600)
W. : Share Premium Received 10000
C. Cash Flow from Financing Activities 85000
Net Increase in Cash( A+B+C)
105000
Add: Opening Cash Balance 1- 4 - 2019
25000
Closing Cash Balance 130000
Working Notes:

1. Interest on Bank Loan

10000 X 8/100 X 6/12 = 400
40000 X 8/100 = 3200
Total Interest = 3600
=====
 2. Debenture Interest
150000X 8/100 = 12000
110000X 8/100 X 6/12 = 4400
Total Interest 16400
======
3. Tangible Assets Account
Particulars Rs. Particulars Rs.
To Balance b/d 620000 By Depreciation 60000
By Cash ( Sale) 20000
To Cash (Purchases) 340000 By Loss on Sale 20000
( Balancing Figure) By Balance c/d 860000
Total 960000 Total 960000

4. Loss on Sale of Tangible Assets

Cost of Asset = 60000

Less: Depreciation = (20000)
Book Value = 40000
Less: Sales Price ( 40000X 50/100)M = (20000)
Loss on Sale = 20000
=====
5. Provision for Taxation Account
Particulars Rs. Particulars Rs.
To Cash (Paid) 35000 By Balance b/d 40000
( Balancing Figure) By P/L A/c 45000
To Balance c/d 50000
Total 85000 Total 85000

24.

Schedule of Changes in Working Capital

Effect on Working Capital
Particulars Previous year Current year Increase Decrease
A. Current assets
Stock 60000 70000 10000
Debtors 40000 48000 8000
Cash 600 1000 400
Bank 2400 7000 4600
Total 103000 126000
B. Current liabilities 13400
Trade creditors 49000 35600
Total 49000 35600
C. Working capital (A-B) 54000 90400 36400 00000
Net increase in Working Capital 36400 -------- -------- 36400
90400 90400 36400 36400
 Fund Flow Statement
Sources Amount Application Amount
Issue of share 40000 Tax paid 6000
Issue of debentures 2000 Dividend paid 10000
Fund from operations 31660 Purchase of plant 20000
Interest on debentures 1260
Net increase in working capital 36400
73660 73660

Fund from Operations

Closing Balance of P&L A/c 2400
Less: Opening Balance of P&L A/c 2000
Current year profit 400
Add: Interest on debentures 1260
Depreciation on building 10000
Provision for tax 8400
Proposed dividend 11600
Fund from Operations 31660

Provision for Taxation Account

Particulars Amount Particulars Amount
To Cash 6000 By Balance B/d 6000
To Balance c/d 8400 By P&L A/c (BF) -Current Year 8400
Provision
14400 14400

Proposed Dividend Account

Particulars Amount Particulars Amount
To Cash 10000 By Balance b/d 10000
To Balance c/d 11600 By P&L A/c (BF) 11600
21600 21600

25.
Balance Sheet as on……………………
Liabilities Rs. Assets Rs.
Share Holders Fund: Fixed Assets 30000
Share Capital 92000 Current Assets:
Reserves and Surplus 28000 120000 Inventory 31000
Current Liabilities: Accounts Receivable 75000
Accounts Payable 38333 Notes Receivables 5000
Notes Payable 2000 Cash/ Bank ( Balancing Figure) 19333
Total 160333 Total 160333
Working Note:
1 Gross Profit Ratio = Gross Profit X 100 = 25
Sales
2 Sales = 80000 = 320000
25%
3 Cost of Sales = Sales- Gross Profit
= 320000-80000=240000
4 Inventory Turnover Ratio = Cost of Goods Sold
Average inventory
8 = 240000
Average inventory

Average inventory = 240000

8
Average inventory = 30000

Average inventory = Opening Inventory + (Opening Inventory+ 2000)

2

30000= 2 X Opening Inventory + 2000

2
60000= 2 X Opening Inventory + 2000

60000-2000 = 2 X Opening Inventory

Opening Inventory = 58000 = 29000

2
Closing Inventory = 29000+ 2000 = 31000

5 Receivables Turnover Ratio = Sales

Accounts Receivable

4 = 320000
Accounts Receivable

Account Receivable = 320000 = 80000

8

6 Sundry Debtors = Accounts Receivable -Notes Receivable

= 80000 – 5000 = 75000

7 Purchases = Cost of Sales + 2000( Excess Closing Inventory)

= 240000+2000 = 242000

8 Payables Turnover Ratio= Purchases

Accounts Payable

Accounts Payable = 242000 = 40333

6
9 Sundry Creditors = Accounts Payables – Notes Payable

= 40333 – 2000 = 38333

10 Fixed Assets Turnover Ratio = Cost of Sales
Fixed Assets
8 = 240000
Fixed Assets

Fixed Assets = 240000 = 30000

8
11 Capital Turnover Ratio = Cost of Sales
Capital

2 = 240000
Capital

Capital = 240000 = 120000

2
12 Share Capital = Capital Employed – Reserves and Surpluses

= 120000 – 28000 = 92000

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