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Finance Computer Packages Question Paper
Finance Computer Packages
Course:Bachelor Of Commerce
Institution: Kca University question papers
Exam Year:2010
UNIVERSITY EXAMINATIONS: 2009/2010
SECOND YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
CMS 205: FINANCE COMPUTER PACKAGES (Day + Evening)
DATE: AUGUST 2010 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
QUESTION ONE
a) Identify four vital services which information systems can provide to a business Organization.
(4 Marks)
b) Finance managers can make decisions at strategic, tactical or operational levels of management.
Explain the nature of decisions made at these levels of management. (6 Marks)
c) (i) What is financial forecasting? (2 Marks)
(ii) Briefly explain any three quantitative techniques that can be used to make financial forecasts.
(6 Marks)
d) Suggest six reasons why a company should automate its financial information system. (6 Marks)
e) Identify and briefly explain three subsystems available in Quick Books (6 Marks)
QUESTION TWO
Outdoors, Inc., has lawn furniture as one of its product lines. They currently have three items in that
line: a lawn chair, a standard bench, and a table. These products are produced in a two-step
manufacturing process involving the tube bending department and the welding department. The hours
required by each item in each department is as follows:
Product
2
Department Chair Bench Table Present Capacity
Bending 1.2 1.7 1.2 1000 hours
Welding 0.8 0.0 2.3 1200 hours
The profit contribution that Outdoors receives from manufacture and sale of one unit of each product is
$3 for a chair, $3 for a bench, and $5 for a table.
The company is trying to plan its production mix for the current selling season. They feel that they can
sell any number they produce, but unfortunately production is further limited by available material
because of a prolonged strike. The company currently has on hand 2,000 pounds of tubing. The three
products require the following amounts of this tubing: 2 pounds per chair, 3 pounds per bench, and 4.5
pounds per table.
In order to determine the optimal product mix, the production manager has formulated the linear
programming problem as shown below.
Product
Chair Bench Table
Contribution $3 $3 $5
Constraint Relation limit
Bending 1.2 1.7 1.2 == 1000
Welding 0.8 0.0 2.3 == 1200
Tubing 2.0 3.0 4.5 == 2000
a) Using the information given above, formulate a model showing the objective function and the
constraint functions (10 Marks)
b) Draw an excel work sheet and show how it can be used to solve the problem modeled above,
indicating the following:
i) The target cells
ii) The changing cells and
iii) The constraint cells (8 Marks)
c) Describe how to get the solver function in Excel 2003 (2 Marks)
3
QUESTION THREE
a) Accounting Packages like QuickBooks generate automatically financial statements such as the
Balance Sheet and the Income Statement. Give the commands for viewing the following reports
and statements:
i. Customer statement
ii. Inventory stock status by item
iii. Audit trail
iv. Income statement
v. Balance Sheet (10 Marks)
b) The following are highly simplified financial statements of Express Ltd for last year:
Profit and loss account for the year ended 31 December: £ 000
Turnover 80
Cost of sales (60)
Gross profit 20
Operating expenses (10)
Operating profit 10
Balance sheet as at 31 December:
£ 000 £ 000
Fixed assets 70
Current assets 20
Creditors: amounts falling due within one year (12)
Net current assets 08
78
Capital and reserves 78
Required:
Calculate any five ratios that the information provided will allow. (10 Marks)
QUESTION FOUR
a) Discuss how the following concepts are facilitated in order to address Computer security in a
typical organization of your own choice dealing with financial transactions
4
(i) Confidentiality (4 Marks)
(ii) Integrity (4 Marks)
(iii)Availability (3 Marks)
b) Describe the process you would use to create a financial model (9 Marks)
QUESTION FIVE
a) In financial modeling situations you can create a couple of simple financial statements, such as the
profit and loss statement as the one shown below:
Derive the formulas that you can use to get the relevant missing figures in the above spreadsheet
(6 Marks)
b) Using imaginary figures construct a Balance sheet statement that can be put on a spreadsheet by
using the following formulas (14 Marks)
Cell Formula Purpose
B8 =SUM(B5:B7) Adds Current Assets for 2001
C8 =SUM(C5:C7) Adds Current Assets for 2000
5
B11 =SUM(B9-B10) Subtracts depreciated value from the original cost - 2001
C11 =SUM(C9-C10) Subtracts depreciated value from the original cost - 2000
B12 =SUM(B8,B11) Adds Current and Fixed Assets - 2001
C12 =SUM(C8,C11) Adds Current and Fixed Assets - 2000
B17 =SUM(B15:B16) Adds Current Liabilities - 2001
C17 =SUM(C15:C16) Adds Current Liabilities - 2000
B19 =SUM(B17:B18) Generates Total Liabilities - 2001
C19 =SUM(C17:C18) Generates Total Liabilities - 2000
B23 =SUM(B21:B22) Adds money owed to the owners - 2001
C23 =SUM(C21:C22) Adds money owed to the owners - 2000
B24 =SUM(B19,B23) Produces total owed - 2001
C24 =SUM(C19,C23) Produces total owed - 2000
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