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Ms Paris Hilton married Swami Nathan and got her self rename Ms Paris Swami Nathan Hilton She has estimated the yearly coast in producing her album to be $ 150,000

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FINANCIAL ACCOUNTANCY<br />

Case – 1<br />

<strong>Paris</strong> <strong>Hil<strong>to</strong>n</strong> marries <strong>Swami</strong> <strong>Nathan</strong><br />

<strong>Ms</strong> <strong>Paris</strong> <strong>Hil<strong>to</strong>n</strong> <strong>married</strong> <strong>Swami</strong> <strong>Nathan</strong> <strong>and</strong> <strong>got</strong> <strong>her</strong> <strong>self</strong> <strong>rename</strong> <strong>Ms</strong> <strong>Paris</strong> <strong>Swami</strong> <strong>Nathan</strong><br />

<strong>Hil<strong>to</strong>n</strong>. <strong>She</strong> <strong>has</strong> <strong>estimated</strong> <strong>the</strong> <strong>yearly</strong> <strong>coast</strong> <strong>in</strong> produc<strong>in</strong>g <strong>her</strong> <strong>album</strong> <strong>to</strong> <strong>be</strong> $ <strong>150</strong>,<strong>000</strong> sales are<br />

<strong>estimated</strong> <strong>to</strong> <strong>be</strong> $ 200,<strong>000</strong>. On <strong>the</strong> close of <strong>the</strong> year, she <strong>got</strong> a report stat<strong>in</strong>g cost as $ <strong>150</strong>,<strong>000</strong><br />

<strong>and</strong> sales as $ 225,<strong>000</strong> <strong>She</strong> was happy stat<strong>in</strong>g <strong>the</strong> sales <strong>has</strong> exceeded <strong>the</strong> target <strong>and</strong> had led <strong>to</strong><br />

<strong>the</strong> award<strong>in</strong>g of bonus for <strong>the</strong> staff, For <strong>the</strong> second year she creates two new <strong>album</strong>s. The<br />

Second year report states <strong>the</strong> <strong>coast</strong> <strong>to</strong> <strong>be</strong> $300,<strong>000</strong> <strong>and</strong> sales as $450,<strong>000</strong>. Like always she is<br />

happy <strong>to</strong> award <strong>in</strong>centive <strong>to</strong> <strong>the</strong> staff <strong>and</strong> feels that <strong>the</strong> performance aga<strong>in</strong> <strong>has</strong> <strong>be</strong>en antaned<br />

consecutively.<br />

Questions:<br />

1) Suggest if any measures <strong>to</strong> <strong>Ms</strong> <strong>Paris</strong> for any ot<strong>her</strong> furt<strong>her</strong> improvements on <strong>her</strong> bus<strong>in</strong>ess<br />

analysis along with reason.<br />

2) What Ot<strong>her</strong> Fac<strong>to</strong>rs, do you th<strong>in</strong>k are essential while do<strong>in</strong>g bus<strong>in</strong>ess analysis <strong>and</strong> award<strong>in</strong>g<br />

<strong>in</strong>centives?<br />

Part 2<br />

1) ‘Account<strong>in</strong>g is closely connected with management control’: Elaborate this statement <strong>and</strong><br />

discuss <strong>the</strong> role of account<strong>in</strong>g <strong>in</strong> provid<strong>in</strong>g feedbacks for management control.<br />

2) What is <strong>the</strong> ma<strong>in</strong> purpose of a balance sheet ?<br />

3) Discuss <strong>the</strong> various ways of present<strong>in</strong>g a profit <strong>and</strong> loss account?<br />

4) Discuss <strong>the</strong> utility of rations from various s<strong>to</strong>ckholder perspective. Also identify <strong>the</strong> three<br />

key f<strong>in</strong>ancial rations from each s<strong>to</strong>ckholder’s perspective?


5) What are <strong>the</strong> f<strong>in</strong>ancial num<strong>be</strong>rs <strong>and</strong> ratios <strong>to</strong> <strong>be</strong> used <strong>and</strong> computed <strong>to</strong> f<strong>in</strong>d out ‘Gear<strong>in</strong>g’ of<br />

a company? What does ‘Gear<strong>in</strong>g’ of a company convey <strong>to</strong> us? Is positive gear<strong>in</strong>g a good figure?<br />

Can we say that hig<strong>her</strong> <strong>the</strong> gear<strong>in</strong>g of a company <strong>the</strong> <strong>be</strong>tter ii is for all s<strong>to</strong>ck holder?<br />

6) Can a leasehold Property <strong>be</strong> depreciated? If yes, Which is <strong>the</strong> appropriate method?<br />

7) What is <strong>the</strong> difference <strong>be</strong>tween <strong>the</strong> straight-l<strong>in</strong>e method of depreciation <strong>and</strong> <strong>the</strong> written<br />

down value method? Which method is more appropriate for report<strong>in</strong>g earn<strong>in</strong>gs?<br />

8) What is block depreciation? W<strong>her</strong>e would block depreciation <strong>be</strong> most appropriate?<br />

9) What is block depreciation? W<strong>her</strong>e would block depreciation <strong>be</strong> most appropriate<br />

Need Answer <strong>She</strong>et of this Question paper, contact<br />

arav<strong>in</strong>d.banakar@gmail.com<br />

www.mbacasestudyanswers.com<br />

ARAVIND – 09901366442 – 09902787224

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