# Special Studies in Finance Prelims Question Paper 2015

JINALL CLASSES

TIME: 2.5HR                                                        SSF PRELIM  EXAM                                                          MARKS 75

NOTE:

WORKING NOTE SHOULD BE PART OF SOLUTION.

EACH QUESTION CARRY EQUAL MARKS.

Q1.  (a) From the following information for 7Star ltd. For year ended 31st march 2013.Calculate the deferred tax asset/liability as per AS-22           5MKS

 Accounting Profit 8,00,000 Book as per MAT 3,50,000 Profit as per Income Tax Act 35,000 Tax Rate 30% Mate Rate 10%

(b) Following is the data regarding six segments of indigo Ltd. (Rs. In lakhs) 5MKS

 Segments A B C D E F Segments revenue in Rs. 50 80 50 30 20 10 Segments results 40 (150) 20 20 (10) 10 Segments Assets 500 600 200 40 100 40

Identify the reporting segments and advise the management of indigo ltd. keeping in view the provision of AS-17 on segment reporting as issued by the ICAI.

(c) Calculate the missing figure: 5MKS

 Particulars Amount in Rs. Sales value in Rs. 5,00,000 Income 1,00,000 Average investment in Rs. 15,00,000 Sales Margin in % ? Capital turnover (times) ? ROI(%) ? EVA (Economic value added in Rs.) ?

Q2. Answer the following                             ( Any2)                 15MKS

(a) Prepare an amortization schedule from the following information

 Amount borrowed 2,40,000 Principal installment (in Rs.) 48,000 Annual Interest 13% Repayment period 5 years

(b) Delta co. ltd in considering the following 2 investments to the proposals X and Y requiring a net cash outlay of Rs. 1,20,000 and Rs. 1,70,000. The cash inflow are tabulated below rank this project in order of their profitability according to net present value and profitability index method. Assume that the firm cost of capital is 15%

 Year Cash  inFlow PV of Rs. 1 at 15% discounted factor Project A in RS. Project A in RS. 1. 15,000 55,000 0.870 2. 35,000 70,000 0.756 3. 50,000 90,000 0.658 4. 70,000 60,000 0.572 5. 4,50,000 40,000 0.497

(c) Explain the various components of project report:

Q3. Answer the following                                             Any 2                     15MKS

(a) Nandlal ltd. Imported goods from Alpha Inc a US co. worth US dollars 5,00,000 on 10th August 2013 when exchange rate was US \$ 1= Rs. 42.90. Nandlal ltd agreed to pay 5 installments as below:

 Date Installments (US\$) Rate of Exchange(RS.) 10-10-2013 75,000 43.75 10-12-2013 1,50,000 44.50 10-2-2013 60,000 45.50 10-4-2014 75,000 43.90 10-6-2014 1,40,000 44.00

The rate of exchange was RS. 43.00 as on 31st march 2014 pass journal entries in the books of Nandlal ltd. In accordance with AS-11

(b) Happy ltd. Imported goods worth US \$ 4,00,000 to M/s Hogg & co. of USA on 10th August 2013 when exchange rate was  RS. 41.00 south ltd. Agreed to pay the amt in 4 equal installments  as under

 Date Exchange Rate in RS. 10-9-2013 42.25 10-10-2013 43.00 10-11-2013 43.50 10-12-2013 43.70

You are required to prepare foreign exchange fluctuation A/c in the books of south ltd.

(c ) What are monetary and Non monetary items as per As- 11?

Q4. Ans the following                     Any 2                     15MKS

(a ) UFO ltd. Had purchased machinery(cash price 61700) on Hire purchase system from Hind machinery ltd. The terms are that they would pay RS. 20,000 down on 1-1-2014 and 4 half yearly installment of Rs. 11,000 each commencing from 1-7-2014. They charged depreciation on machinery @ of 100% p.a. Show Hind machinery Ltd. A/c to record the above transactions in the books of UFO ltd, til the installments are paid off.UFo ltd. Accounting year ended on 31stDecember each year.

(b) Royal limited IPO opened on 6thOctober , 2013 and closed on 8th October 2013. Co. issued 20 Crores share in the price band 1200-1300. Public applied for 200 crore shares. The co. announced issued Price of Rs. 1250. Average price of application receives is Rs. 1270. Pass necessary journal entries in the books of Royal ltd. Refund and allotment of shares was done on 20th October 2013. Face value of RS. 10.

(c ) Explain the various functions of merchant banking?

Q5. Solve the foll casestudy:                       15MKS

Satyam Ltd. Furnishing you the following information :

1. Proposed setup at Dhanu B. Tax Rate is @40% C. Depreciation P.a RS. 2,500 lakhs
2. Term loan required RS. 40 lakhs E. Expected ROI @ 30% F. interest rate @ 13%
3. tenure of loan = 8years repayable with installments & Interest at the end of each year.
4. Tax holiday for 1st 5 years

The cost of the proposed project and the means of finance are as follows:

 Proposed Project IN lakhs Cost of project:- Plant and machinery 30,000 Factory building 12,000 Margin Money for working capital 2,000 Total:- 44,000 Means of finance : Additional equity share capital 3,000 Retained earnings 1,000 Term loan 40,000 Total: 44,000

As the bank executive of the term landing institute you are requested to :-

1. Prepare flash report from the point of view of the term landing institution
2. Evaluate the project for profitability in the next 3 years
3. Calculate the DSCR and ICR for the 1st 3 years and offer comment
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