MS- 04 

Management Programme

ASSIGNMENT
FIRST SEMESTER
(January to June)
2020

MS - 04: Accounting and Finance for Managers

School of Management Studies

INDIRA GANDHI NATIONAL OPEN UNIVERSITY
MAIDAN GARHI, NEW DELHI – 110 068
 
 ASSIGNMENT

Course Code : MS-04

Course Title : Accounting and Finance for Managers

Assignment Code : MS-04/TMA/SEM-I/2020

Coverage : All Blocks

Note : Attempt all questions and submit this assignment to the coordinator of your study centre on or
before 30th April, 2020.

1. “Accounting is closely connected with Control”. Elaborate the statement and discuss the role of
accounting feedback in the process of control.
2. Prepare Funds Flow Statement and Cash Flow Statement for the year ending March 31, 2019
from the information given below.

Balance Sheet
(as on March 31)
(Rs. ‘000)
Liabilities 2018 2019 Assets 2018 2019
Trade Creditors 100 40 Cash at Bank 100 65
Bills Payable 50 60 Accounts 105 120
Receivable
Outstanding 25 20 Bills 130 140
Expenses Receivable
Bonds Payable 220 140 Inventory 110 40
Accumulated Machinery 120 160
Depreciation

300 310
On Machinery 30 35 Building

On Building 75 85 Land 60 130

Reserves 100 115 Patents 55 60
Retained 130 170
Earnings
Share Capital 250 360

980 1,025 980 1,025

Profit from operations after providing Rs. 10,000 as depreciation on Building and Rs. 10,000 on
Machinery and Rs. 5,000 as amortization on Patents for the year April ’18-March ’19 was Rs.
 35,000. Other revenues for the year were Rs. 40,000. An old machine with original cost of Rs.
15,000 was sold at a loss of Rs. 5,000.

3. A company requires capital funds of Rs. 5 crores and has two options: (i) To raise the amount by
the issue of 15% debentures, and (ii) To issue equity shares at a rate of Rs. 20 per share. It
already has 40 lacs equity shares issued and debt financing of Rs. 6 crores at the rate of 12%.
Find out the expected EPS under both financing options at the given EBIT levels of Rs. 2 crores
and Rs. 7.5 crores. What should be choice of the company given that the applicable tax rate is
50%?

4. Explain the meaning of Variance. Taking a suitable example explain how material variances can
be computed.
5. In organisation of your choice try to find out the factors that are taken into consideration while
making the dividend decision.