IGNOU MS-04 SOLVED ASSIGNMENT JULY-DECEMBER 2018

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Course Code                           :           MS-04

Course Title                             :           Accounting and Finance for Managers

Assignment Code                    :           MS-04/TMA/SEM-II/2018

Coverage                                :           All Blocks

Note : Attempt all the questions and submit this assignment on or before 31^st October,  2018 to the coordinator of your study center.

1. As a Finance Manager what are the kind of decisions that you have to make about your company and its activities? How do these decisions differ form those which investors, regulatory agencies and others make about your company? Is the same kind of information needed by You and the outsiders of the company? If so what is that information? If not, what are the essential differences?
2. You are required to prepare the Statement of Sources and Application of Funds from the given Financial Statements of ABC Limited for the years 2016 & 2017. Also prepare the Statement showing in details the item-wise increase or decrease in the Net Working Capital.

	31.12.2017 Rs.	31.12.2016 Rs.
Assets
Cash at Bank	45,000	1,30,000
Sundry Debtors	1,40,000	90,700
Stock-in-Trade	1,96,000	1,42,000
Fixed Assets less Depreciation	6,00,000	3,60,000
Investments	10,000	11,250
Prepaid Expenses	21,000	14,000
Rs	10,12,000	7,48,450
Liabilities
Sundry Creditors	2,98,000	2,51,450
Provision for Taxation	1,72,000	65,000
Secured Loan from Bank	-	87,000
Reserves and Surplus	3,12,000	1,48,000
Share Capital:
Ordinary Shares of Rs.100 each	2,30,000	1,97,000
Rs.	10,12,000	7,48,450

Further it is informed that:

The position in respect of Reserves and Surplus is:

	Rs.
Balance as on 1st January, 2017	1,48,000
Net profit for the year	1,98,500
	3,46,500
Less: Dividend	34,500
	3,12,000

(i) On 31st December 2017 the accumulated depreciation on fixed assets was Rs. 1,80,000 and on 31st December 2016 Rs 1,60,000. Machinery costing Rs. 20,000 which was one-half depreciated was discarded and written off in 2017. Depreciation for the year 2017 amounted to Rs. 30,000

(ii) Investments costing Rs. 5,000 were sold during the year 2017 for Rs. 4,800 and Government Securities of the face value of Rs. 4,000 were purchased during the year for Rs. 3,750

3. The data related to Company X, Company Y and Company Z is as given below.

	Company X	Company Y	Company Z
Budgeted sales in units	10,000	10,000	10,000
Budgeted selling price per unit	Rs.2.00	Rs.2.00	Rs.2.00
Budgeted variable costs per unit	Rs.1.50	Rs.1.25	Rs.1.00
Budgeted fixed expenses
Total	Rs.3,000	Rs.5,500	Rs.8,000
Budgeted capacity	80%	80%	80%

From the information given above you are required to calculate for each company :

(a) The budgeted profit.

(b) The budgeted break-even point in unit sales.

(c) The budgeted margin between break-even point and budgeted sales expressed as a percentage of total capacity.

(d) The impact on profits of a ± 10% deviation in budgeted sales.

Comment briefly on the effect of this in relation to the distribution between the companies’ fixed and variable expenses.

4. (a) Describe the characteristics of a flexible budget?

(b) “For private sector” budgets are important in profit planning, but budget are costly for not-for-profit organization” Respond.

5. Discuss your Role as a Finance Manager of your company. What will be the alternatives and factors that you would consider before finalizing your views on dividend policy?

IGNOU MS-04 SOLVED ASSIGNMENT JULY-DECEMBER 2018

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