Ms4 Solved Assignment

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IGNOU MBA MS - 04 Solved Assignment 2011
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Course Code:MS - 04
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Course Title: Accounting and Finance for Managers
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Assignment Code:MS-04/SEM - I /2011
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Coverage:All Blocks
Note: Answer all the questions and send them to the Coordinator of the Study Centre you are attached with.

1. Following are the balance sheets of a limited company as on 31st December, 2009 and 2010.
Liabilities| 2009Rs.| 2010Rs.| Assets| 2009Rs.| 2010Rs.| Share Capital Reserves P. & L. A/cBank Loan (Long-term)CreditorsBills Payable | 54.00013,0008,60025,00028,0008,000| 74,00015,5008,800-24,0008,500| GoodwillBuildingsPlantStockDebtorsCashBank| 3,00050,95035,00025,50022,000150-| 2,52048,00043,00018,80016,2001802,100| | 1,36,600| 1,30,800| | 1,36,600| 1,30,8 00|

Taking into account the following additional information, you are required to prepare funds flow statement and statement of change in working capital. a) Dividend paid was Rs. 6,000.
b) Rs. 3,600 was written off as depreciation on plant and Rs. 2,950 on buildings. c) Profit on sale of plant was Rs. 3,000.

1. Solution : Statement of Changes in Working Capital
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                                                               Effect on WC                                   PY        CY              Increase     Decrease  Current Assets
Stock                       25,500     18,800      -                  6,700 Debtors                  22,000    16,200     -                   5,800 Cash                              150           180            30              - Bank                                  -        2,100       2,100             -       Total                        47,650    37,280       2,130       12,500  

Current Liabilities
Creditors                28,000     24,000     4,000 Bills Payable             8,000      8,500                           500   Total                          36,000    32,500    4,000            500  Net WC                       11,650   4,780   Decrease in WC                      6,870                                      11,650  11,650          

Fund Flow Statement

Sources of Fund
Fund from Operation                       12,7301 Share Capital                                      20,000 Decrease in WC                                   6,870 Total                                                      39,600

Application of Fund
Payment of dividends                       6,000 Repayment of Bank Loan                25,000
Net Purchase of plant                        8,6002 Total                                                       39,600

1Funds from Operation
Net Profit for 2010 200
Add : Transfer to Reserve 2,500
Goodwill Written off 480
Dividends 6,000 Depreciation 6,550
15,730 Less: Gain on sale of plant 3,000 
12,730

                                                        2Plant Beginning Balance       35,000        Depreciation           3,600 Gain on sale                      3,000        Ending Balance    43,000 Bank (Net Purchase)

  Balancing Figure           8,600                                                                                                        46,600                                            46,600

2.Two manufacturing companies which have the following operating details decide to merge:

Particulars | Company No. 1 | Company No. 2|
Capacity utilization %Sales...
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