Monday, May 20, 2019

Gauhati University Question Papers: Financial Statement Analysis (Major) (Nov-Dec’ 2014)


2014
FINANCIAL STATEMENT ANALYSIS
(Major)
Full Marks: 80
Time: 3 hours
(The figures in the margin indicate full marks for the questions)
1. Answer as directed:

a)         Write the meaning of (1) Assets, (2) Income and (3) Expenses in the context of Financial Statements.           3
b)         Write two objectives of Financial Statement Analysis.                 1
c)          How is ROI computed?                                                                     1
d)         Write two limitations of accounting ratios.                                     1
e)         Write the meaning of (1) Fund Flow (2) Cash Flow and (3) Working capital.
f)          What is Corporate Annual Report?                                      1
2. Answer the following:                                        5x2=10
a)         Opening Stock; Rs. 5,000; Closing Stock; Rs. 7,000; Purchases Rs. 36,000 and Sales Rs. 70,000. Calculate inventory turnover ratio.
b)         State the features of Balance Sheet.
c)          Mention four mandatory disclosures to be made in Corporate Annual Report.
d)         Why are Voluntary Disclosures made in the annual report of a company?
e)         State whether there is any Inflow or Outflow of Fund from the following transactions. State the amount of such inflow/outflow.
1)         Purchase of a machine valued Rs. 5,00,000; payment is settled as below: Issue of Equity Shares of Rs. 4,00,000 (Face value Rs. 10) and the balance in cash.
2)         Redemption of Preference Shares of Rs. 20,000.
3. Answer the following:                                                                   5x4=20
a)         Describe very briefly the limitations of financial statements.
b)         Explain the need and objectives of corporate financial reporting.
c)          Write a critical note on common-size statement stating its merits and demerits.
Or
Current ratio
Liquid Ratio
Working Capital
Bank Overdraft
2.5
1.5
Rs. 60,000
Rs. 11,000
Calculate: Current Assets, Current Liabilities, Liquid Assets and Quick Liabilities.
d)      Discuss briefly the advantages and cash flow statement over fund flow statement.
4. Answer the following questions:                                                         
(a) (1) Explain the purposes of accounting information.                         2
(2) Describe briefly the following qualities of accounting information – Reliability, Relevance, Understandability and Comparability.                                                              8
(b) Explain the relevant provisions of Companies Act in regard to the preparation of Balance Sheet.                                                                                                                                               10
(c) Consider the following information collected from the books of KK Co. Ltd.

Rs.
Opening Stock
Closing Stock
Sales
Purchases
Opening debtors
Closing debtors
Equity Share Capital
10% Preference Share Capital
8% Debentures
Reserve and Surplus
Earnings before Income and Tax
40,000
30,000
2,00,000
1,10,000
9,000
7,000
20,000
20,000
30,000
15,000
50,000
You are required to calculate:
1)         Inventory Turnover Ratio (at cost).
2)         Debtors Turnover Ratio.
3)         Debt-Equity Ratio.
4)         Capital Gearing Ratio.
5)         Fixed Charge bearing Ratio.
(d) You are supplied with the following information by the accountant of B. Bora Co. Ltd. related to the accounting year 2012-13. You are required to prepare cash flow statement as per AS-3.      10

Rs.
Opening Balance:
Cash in hand
Cash at bank

Summary of transactions:
Cash received from customers
Purchase of Fixed Assets
Redemption of 10% Bonds
Proceeds from issue of 10% Preference Shares
Cash paid to suppliers
Office and Employee Expenses met
Proceeds from cash sales
Interest paid
Dividend paid
Donation paid
Income tax paid

1,00,000
2,50,000


4,50,000
6,00,000
2,00,000
5,00,000
3,00,000
7,00,000
6,50,000
20,000
10,000
5,000
3,000


-000-

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