ASSIGNMENT Course Code : MS - 4 Course Title : Accounting and finance for managers Assignment Code : MS-4/TMA/SEM - I /2012 Coverage : All Blocks Note: Answer all the questions and submit this assignment on or before April 30, 2012, to the coordinator of your study center. 1. The Balance Sheet of Bharat Machinery Ltd., as on December 31, 2009 and 2010 are as follows: Items Dec. 31, 2009 Rs. Dec. 31, 2010 Rs. Assets Plant and Machinery 5,00,000 8,00,000 Land and Buildings 80,000 1,20,000 Stock 1,00,000 75,000 Sundry Debtors 1,50,000 1,60,000 Cash 20,000 20,000 8,50,000 11,75,000 Liabilities and Capital Share Capital 5,00,000 7,00,000 Profit and Loss A/c 1,00,000 1,60,000 General Reserve 50,000 70,000 Sundry Creditors 1,53,000 1,90,000 Bills Payable 40,000 50,000 Outstanding Expenses 7,000 5,000 8,50,000 11,75,000 Additional Information (i) Depreciation of Rs. 50,000 has been charged on Plant and Machinery during the year 2010. (ii) A piece of machinery was sold for Rs. 8,000 during the year 2010. It had cost Rs. 12,000, depreciation of Rs. 7,000 had been provided on it. Prepare a schedule of change in working capital and a statement showing the sources and application of funds for the year 2010. 2. From the following cost, production and sales data of Decors Motor Ltd., prepare comparative income statement for three years under (i) absorption costing method, and (ii) marginal costing method. Indicate the unit cost for each year under each method. Also evaluate the closing stock. The company produces a single article for sale. Particulars Year 2008 2009 2010 Selling Price per unit 20 20 20 Variable manufacturing cost per unit 10 10 10 Total fixed manufacturing cost 5000 5000 5000 Opening Stock (Units) - - 500 Units Produced 1000 1500 2000 Units Sold 1000 1000 1500 Closing Stock (Units) - 500 1000 3. From the following information related to XYZ Ltd.; you are required to find out (a) contribution (b) Break-even point in units (c) Margin of safety, (d) Profit Total Fixed Costs Rs. 6,000 Total Variable Costs Rs. 20,000 Total Sales Rs. 32,000 Units Sold 4,000 Units Also calculate the volume of sales to earn profit of Rs. 12,000. 4. Write short notes on the following: a) Performance budgeting b) Zero base budgeting c) Factors affecting dividend decisions d) Accrual concept 5. What is capital structure? Explain the features and determinants of an appropriate capital structure.