IGNOU MMPC-004 June 2022 Previous Year Question Paper

Q1.From the following balances taken from the ledger of M/s Fort & Palace Ltd. on 31 st March,

Q2.prepare :

(a) Trading Account

(b) Profit and Loss Account for the year ended 31st March, 2021

(c) Balance Sheet as on 31st March, 2021 MMPC-004 2 Particulars Amount < Particulars Amount Sundry creditors 57,000 Bad debts 300 Building 45,000 Loan from X 7,500 Income tax 3,075 Sundry debtors 28,500 Loose tools 3,000 Investments 19,500 Cash at bank 48,600 Provision for bad debts 4,800 Sundry expenses 5,970 Rent and Rates 2,550 Interest received 225 Furniture 9,000 Purchases 4,71,000 Stock (01.04.2020) 82,050 Wages 30,000 Capital 1,42,170 Carriage inwards 3,360 Discount allowed 1,890 Sales 5,55,000 Dividends received 1,605 Motor van 37,500 Drawings 6,000 Cash in hand 1,005 Bills payable 30,000 Adjustments to be taken into account :

(i) Write off further < 900 as bad debt out of sundry debtors and create a provision for bad debts at 20% of debtors.

(ii) Dividend accrued and due on investment is < 405. Rates paid in advance is < 300 and outstanding wages is < 1,350.

(iii) On 31 .03.2021, stock was valued at < 45,000 and loose tools were valued at < 2,400.

(iv) Write off 5% for depreciation on b uilding and 40% on motor van.

(v) Provide for interest at 12% p.a. on loan taken on 01.06.2020.

(vi) Income tax paid is to be treated as drawings.

Q3.Describe the activities taken into consideration for preparation of cash flow statement. Discuss the direct and indirect method of preparation of cash flow statement and highlight the main differences among them.

Q4.What are the elements of cost ? How is the total cost calculated taking into consideration prime cost, factory cost and office cost ? Discuss t he classification of c osts based on the variable nature of cost.

Q5.What is ‘Activity -Based Costing’ ? Explain its main features, objectives, merits and demerits.

Q6.Describe the process for implementation of activity-based costing.

Q7.Describe the drawback s of traditional budgeting techniques. Also explain the concepts of ‘Performance Budgeting’ and ‘Zero Base Budgeting’. Discuss the application of these techniques.

Q8.What is Variance ? How are the following variances calculated ?

(a) Direct Labour Rate Variance

(b) Direct Labour Efficiency (Time) Variance

(c) Direct Material Price Variance

(d) Direct Material Usage Variance Discuss the possible causes for each of these variances.

Q9.What is an ‘Annual Report’ ? Briefly discuss the various contents of Annual Report and describe the significance of the information contained in each part of the Annual Report.

Q10.Explain the concept of ‘Fraud Triangle’ and discuss the application of forensic accounting.