Chapter 3 from Textbook Management Accounting Ts Grewal (2017) for Class 12 ACCOUNTANCY

Question 24:

Answer:

$\begin{array}{l} (i) Current Ratio \\ Current Assets = Total Assets - Fixed Assets - Non-Current Investment - Long term Loans and Advances \\ = 8,00,000 - 3,00,000 - 50,000 - 50,000 = Rs 4,00,000 \\ Current Liabilities = Total Debt - Non - Current Liabilities \\ = 6,00,000 - 2,00,000 - 2,00,000 = Rs 2,00,000 \\ Current Ratio = \frac{Current Assets}{Current Liabilities} \\ = \frac{4,00,000}{2,00,000} = 2 : 1 \\ (ii) Quick Ratio \\ Quick Assets = Current Assets - Stock - Prepaid Expenses \\ = 4,00,000 - 95, 000 - 5, 000 = Rs 3,00,000 \\ Quick Ratio = \frac{Quick Assets}{Current Liabilities} \\ = \frac{3, 00, 000}{2, 00, 000} = 1 .5 : 1 \end{array}$

Question 25:

$\begin{array}{l} (i) Current Ratio \\ Current Assets = Total Assets - Fixed Assets - Non-Current Investment - Long term Loans and Advances \\ = 8,00,000 - 3,00,000 - 50,000 - 50,000 = Rs 4,00,000 \\ Current Liabilities = Total Debt - Non - Current Liabilities \\ = 6,00,000 - 2,00,000 - 2,00,000 = Rs 2,00,000 \\ Current Ratio = \frac{Current Assets}{Current Liabilities} \\ = \frac{4,00,000}{2,00,000} = 2 : 1 \\ (ii) Quick Ratio \\ Quick Assets = Current Assets - Stock - Prepaid Expenses \\ = 4,00,000 - 95, 000 - 5, 000 = Rs 3,00,000 \\ Quick Ratio = \frac{Quick Assets}{Current Liabilities} \\ = \frac{3, 00, 000}{2, 00, 000} = 1 .5 : 1 \end{array}$

Answer:

$Debt Equity Ratio = \frac{Debt}{Equity}$

Equity	=	Share Capital + Reserve and Surplus
	=	5, 00,000 + 2, 00,000 + 3, 00,000
	=	Rs 10, 00,000

Debt	=	Long Term Borrowings + Long Term Provision
	=	7, 00,000 + 50,000
	=	Rs 7, 50,000
	=	$\frac{7, 50, 000}{10, 00, 000}$
	=	0.75:1

Question 26:

$Debt Equity Ratio = \frac{Debt}{Equity}$

Equity	=	Share Capital + Reserve and Surplus
	=	5, 00,000 + 2, 00,000 + 3, 00,000
	=	Rs 10, 00,000

Debt	=	Long Term Borrowings + Long Term Provision
	=	7, 00,000 + 50,000
	=	Rs 7, 50,000
	=	$\frac{7, 50, 000}{10, 00, 000}$
	=	0.75:1

Answer:

Debt	=	Total Debt – Current Liabilities
	=	1, 80,000 – 20,000
	=	Rs. 1, 60,000

Equity	=	Total Assets – Current Liabilities – Non Current Liabilities
	=	2, 60,000 – 20,000 – 1, 60,000
	=	Rs. 80,000

\begin{array}{ccl} Debt Equity Ratio & = & \frac{Debt}{Equity} \\ = & \frac{1, 60, 000}{80, 000} \\ = & 2 : 1 \end{array}

Question 27:

Debt	=	Total Debt – Current Liabilities
	=	1, 80,000 – 20,000
	=	Rs. 1, 60,000

Equity	=	Total Assets – Current Liabilities – Non Current Liabilities
	=	2, 60,000 – 20,000 – 1, 60,000
	=	Rs. 80,000

\begin{array}{ccl} Debt Equity Ratio & = & \frac{Debt}{Equity} \\ = & \frac{1, 60, 000}{80, 000} \\ = & 2 : 1 \end{array}

Answer:

$Debt Equity Ratio = \frac{Debt}{Equity}$

Debt	=	Long Term Borrowings + Long Term Provision
	=	14, 00,000 + 1, 00,000
	=	Rs 15, 00,000

Equity	=	Share Capital + Reserve and Surplus
	=	8, 00,000 + 2, 00,000
	=	Rs 10, 00,000
Debt Equity Ratio	=	$\frac{15, 00, 000}{10, 00, 000}$
	=	1.5: 1

Question 28:

$Debt Equity Ratio = \frac{Debt}{Equity}$

Debt	=	Long Term Borrowings + Long Term Provision
	=	14, 00,000 + 1, 00,000
	=	Rs 15, 00,000

Equity	=	Share Capital + Reserve and Surplus
	=	8, 00,000 + 2, 00,000
	=	Rs 10, 00,000
Debt Equity Ratio	=	$\frac{15, 00, 000}{10, 00, 000}$
	=	1.5: 1

Answer:

Let’s take Debt = Rs. 50,000 and Equity = Rs. 1, 00,000

1. Issue of Shares say Rs 20,000, So

2. Cash received from Debtors Say Rs. 20,000, So

3. Redemption of Debentures Say Rs. 20,000, So

4. Purchase goods on credit sale Say Rs. 20,000

Question 29:

Let’s take Debt = Rs. 50,000 and Equity = Rs. 1, 00,000

1. Issue of Shares say Rs 20,000, So

2. Cash received from Debtors Say Rs. 20,000, So

3. Redemption of Debentures Say Rs. 20,000, So

4. Purchase goods on credit sale Say Rs. 20,000

Answer:

$\begin{array}{l} Debt = Long Term Borrowings + Long Term Provisions \\ = 4,20,000+1,40,000 = Rs 5,60,000 \\ Equity = Total Assets - Total Debts \\ = (8,40,000 -1,40,000+14,000+56,000+3,50,000) - (4,20,000 -1,40,000 -2,80,000)= Rs 2,80,000 \\ Debt to Equity Ratio = \frac{Debt}{Equity} \\ = \frac{5, 60, 000}{2, 80, 000} = 2 : 1 \end{array}$

Question 30:

$\begin{array}{l} Debt = Long Term Borrowings + Long Term Provisions \\ = 4,20,000+1,40,000 = Rs 5,60,000 \\ Equity = Total Assets - Total Debts \\ = (8,40,000 -1,40,000+14,000+56,000+3,50,000) - (4,20,000 -1,40,000 -2,80,000)= Rs 2,80,000 \\ Debt to Equity Ratio = \frac{Debt}{Equity} \\ = \frac{5, 60, 000}{2, 80, 000} = 2 : 1 \end{array}$

Answer:

$Debt Equity Ratio = \frac{Debt}{Equity}$

Debt	=	Long Term Borrowings + Long Term Provision
	=	Rs 4, 50,000

Equity	=	Share Capital + Reserve and Surplus
	=	2, 50,000 + 50,000
	=	Rs 3, 00,000
Debt Equity Ratio	=	$\frac{4, 50, 000}{3, 00, 000}$
	=	1.5: 1

Question 31:

$Debt Equity Ratio = \frac{Debt}{Equity}$

Debt	=	Long Term Borrowings + Long Term Provision
	=	Rs 4, 50,000

Equity	=	Share Capital + Reserve and Surplus
	=	2, 50,000 + 50,000
	=	Rs 3, 00,000
Debt Equity Ratio	=	$\frac{4, 50, 000}{3, 00, 000}$
	=	1.5: 1

Answer:

$Debt Equity Ratio = \frac{Debt}{Equity}$

Debt	=	Long Term Borrowings + Long Term Provision
	=	2,00,000 + 50,000
	=	Rs 2,50,000

Equity	=	Share Capital + Reserve and Surplus
	=	6, 00,000 – 1, 00,000
	=	Rs 5,00,000
Debt Equity Ratio	=	$\frac{2, 50, 000}{5, 00, 000}$
	=	0.5: 1

Question 32:

$Debt Equity Ratio = \frac{Debt}{Equity}$

Debt	=	Long Term Borrowings + Long Term Provision
	=	2,00,000 + 50,000
	=	Rs 2,50,000

Equity	=	Share Capital + Reserve and Surplus
	=	6, 00,000 – 1, 00,000
	=	Rs 5,00,000
Debt Equity Ratio	=	$\frac{2, 50, 000}{5, 00, 000}$
	=	0.5: 1

Answer:

Shareholder’s Fund	=	Share Capital + Reserve and Surplus
	=	4, 50,000 + 75,000
	=	Rs. 5, 25,000
Proprietary Ratio	=	$\frac{5, 25, 000}{7, 50, 000}$
	=	0.7: 1

Question 33:

Shareholder’s Fund	=	Share Capital + Reserve and Surplus
	=	4, 50,000 + 75,000
	=	Rs. 5, 25,000
Proprietary Ratio	=	$\frac{5, 25, 000}{7, 50, 000}$
	=	0.7: 1

Answer:

$\begin{array}{l} Debt to Equity Ratio = \frac{Debt}{Equity} \\ = \frac{8, 00, 000}{4, 00, 000} = 2 : 1 \\ Debt = Long Term Borrowings + Long Term Provision \\ =5,00,000+3,00,000 = Rs 8,00,000 \end{array}$

$\begin{array}{l} Proprietary Ratio = \frac{Shareholder's Funds}{Total Assets} \times 100 \\ = \frac{4, 00, 000}{16, 00, 000} \times 100 = 25 % \\ Shareholders' Funds/Equity = Non-Current Assets + Working Capital - Non-Current Liabilities \\ = 8,00,000 + 4,00,000 - 8,00,000 = Rs 4,00,000 \\ Working Capital = 8,00,000 - 4,00,000 = 4,00,000 \end{array}$

Question 34:

$\begin{array}{l} Debt to Equity Ratio = \frac{Debt}{Equity} \\ = \frac{8, 00, 000}{4, 00, 000} = 2 : 1 \\ Debt = Long Term Borrowings + Long Term Provision \\ =5,00,000+3,00,000 = Rs 8,00,000 \end{array}$

$\begin{array}{l} Proprietary Ratio = \frac{Shareholder's Funds}{Total Assets} \times 100 \\ = \frac{4, 00, 000}{16, 00, 000} \times 100 = 25 % \\ Shareholders' Funds/Equity = Non-Current Assets + Working Capital - Non-Current Liabilities \\ = 8,00,000 + 4,00,000 - 8,00,000 = Rs 4,00,000 \\ Working Capital = 8,00,000 - 4,00,000 = 4,00,000 \end{array}$

Answer:

$Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{10, 00, 000}{25, 00, 000} = 0.4 : 1$

Debt	=	Long Term Borrowings + Long Term Provision
	=	8, 00,000 + 2, 00,000
	=	Rs 10, 00,000

Question 35:

$Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{10, 00, 000}{25, 00, 000} = 0.4 : 1$

Debt	=	Long Term Borrowings + Long Term Provision
	=	8, 00,000 + 2, 00,000
	=	Rs 10, 00,000

Answer:

$Debts to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{12, 00, 000}{44, 00, 000} = 0.27 : 1$

Debt	=	Total Debt + Short Term Borrowings – Other Current Liabilities
	=	20, 00,000 - 4, 00,000 -4, 00, 000
	=	Rs 12, 00,000

Total Assets = Total Liabilities = 24, 00,000 + 20, 00,000 = Rs. 44, 00,000

Question 36:

$Debts to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{12, 00, 000}{44, 00, 000} = 0.27 : 1$

Debt	=	Total Debt + Short Term Borrowings – Other Current Liabilities
	=	20, 00,000 - 4, 00,000 -4, 00, 000
	=	Rs 12, 00,000

Total Assets = Total Liabilities = 24, 00,000 + 20, 00,000 = Rs. 44, 00,000

Answer:

$\begin{array}{l} Debt to Total Assets Ratio = \frac{Debt}{Total Assets} \\ = \frac{24, 00, 000}{42, 00, 000} = 0 .57 : 1 \\ Total Assets = Shareholder's Funds + Total Debt \\ = 6,00,000 + 36,00,000 = Rs 42,00,000 \\ Debt = Total Debt - Current Liabilities = 36, 00, 000 - 12, 00, 000 = Rs 24, 00, 000 \\ Current Liabilities = Current Asset - Working Capital = 15, 00, 000 - 3, 00, 000 = Rs 12, 00, 000 \end{array}$

Question 37:

$\begin{array}{l} Debt to Total Assets Ratio = \frac{Debt}{Total Assets} \\ = \frac{24, 00, 000}{42, 00, 000} = 0 .57 : 1 \\ Total Assets = Shareholder's Funds + Total Debt \\ = 6,00,000 + 36,00,000 = Rs 42,00,000 \\ Debt = Total Debt - Current Liabilities = 36, 00, 000 - 12, 00, 000 = Rs 24, 00, 000 \\ Current Liabilities = Current Asset - Working Capital = 15, 00, 000 - 3, 00, 000 = Rs 12, 00, 000 \end{array}$

Answer:

$\begin{array}{l} Debt to Total Assets Ratio = \frac{Debt}{Total Assets} \\ = \frac{12, 00, 000}{24, 00, 000} = 0 .5 : 1 \\ Debt = Long term Debt + Long term Provision \\ = 9,00,000 + 3,00,000 = Rs 12,00,000 \\ Total Assets = 18, 00,000 - 3,00,000 + 30,000 + 1,20,000 + 7,50,000 = Rs 24,00,000 \end{array}$

Question 38:

$\begin{array}{l} Debt to Total Assets Ratio = \frac{Debt}{Total Assets} \\ = \frac{12, 00, 000}{24, 00, 000} = 0 .5 : 1 \\ Debt = Long term Debt + Long term Provision \\ = 9,00,000 + 3,00,000 = Rs 12,00,000 \\ Total Assets = 18, 00,000 - 3,00,000 + 30,000 + 1,20,000 + 7,50,000 = Rs 24,00,000 \end{array}$

Answer:

Debt	=	Total Debt - Current Liabilities
	=	15, 00,000 – (4, 00,000 + 50, 000 + 10,000 + 1, 00,000)
	=	15, 00,000 - 5, 60,000
	=	Rs 9, 40,000

Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{9, 40, 000}{20, 00, 000} = 0.47 : 1

Question 39:

Debt	=	Total Debt - Current Liabilities
	=	15, 00,000 – (4, 00,000 + 50, 000 + 10,000 + 1, 00,000)
	=	15, 00,000 - 5, 60,000
	=	Rs 9, 40,000

Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{9, 40, 000}{20, 00, 000} = 0.47 : 1

Answer:

$Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{2, 00, 000}{11, 00, 000} = 0.18 : 1$

Question 40:

$Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{2, 00, 000}{11, 00, 000} = 0.18 : 1$

Answer:

Shareholder’s Fund	=	Share Capital + Reserve and Surplus
	=	7, 00,000 + 2, 50,000 + 3, 00,000 + 2, 50,000
	=	Rs. 15, 00,000

Total Assets	=	Fixed Assets + Investment + Current Assets
	=	35, 00,000 + 2, 00,000 + 8, 00,000
	=	Rs. 45, 00,000
Proprietory Ratio	=	$\frac{15, 00, 000}{45, 00, 000}$
	=	0.33: 1

Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{25, 00, 000}{45, 00, 000} = 0.55 : 1

Debt	=	Long Term Borrowings + Long Term Provision
	=	20, 00,000 + 5, 00,000
	=	Rs.25, 00,000

Question 41:

Shareholder’s Fund	=	Share Capital + Reserve and Surplus
	=	7, 00,000 + 2, 50,000 + 3, 00,000 + 2, 50,000
	=	Rs. 15, 00,000

Total Assets	=	Fixed Assets + Investment + Current Assets
	=	35, 00,000 + 2, 00,000 + 8, 00,000
	=	Rs. 45, 00,000
Proprietory Ratio	=	$\frac{15, 00, 000}{45, 00, 000}$
	=	0.33: 1

Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{25, 00, 000}{45, 00, 000} = 0.55 : 1

Debt	=	Long Term Borrowings + Long Term Provision
	=	20, 00,000 + 5, 00,000
	=	Rs.25, 00,000

Answer:

Shareholder’s Fund	=	Share Capital + Reserve and Surplus
	=	90,000 + 60,000 + 30,000 + 60,000
	=	Rs.2, 40,000

Total Assets	=	Fixed Assets + Investment + Current Assets
	=	6, 00,000 + 60,000 + 3, 00,000
	=	Rs. 9, 60,000

Debt	=	Long Term Borrowings + Long Term Provision
	=	Rs 4, 80,000

Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{4, 80, 000}{9, 60, 000} = 0.5 : 1

Question 42:

Shareholder’s Fund	=	Share Capital + Reserve and Surplus
	=	90,000 + 60,000 + 30,000 + 60,000
	=	Rs.2, 40,000

Total Assets	=	Fixed Assets + Investment + Current Assets
	=	6, 00,000 + 60,000 + 3, 00,000
	=	Rs. 9, 60,000

Debt	=	Long Term Borrowings + Long Term Provision
	=	Rs 4, 80,000

Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{4, 80, 000}{9, 60, 000} = 0.5 : 1

Answer:

$\begin{array}{l} Debt to Equity Ratio = \frac{Debt}{Equity} \\ = \frac{16, 50, 000 - 6, 00, 000}{13, 50, 000} = 0 .78 : 1 \\ Equity = Total Assets - Total Debts \\ = 30,00,000 - 16,50,000 = Rs 13,50,000 \end{array}$

$\begin{array}{l} Debt to Total Assets Ratio = \frac{Debt}{Total Assets} \\ = \frac{16, 50, 000 - 6, 00, 000}{30, 00, 000} = 0 .35 : 1 \end{array}$

$\begin{array}{l} Proprietary Ratio = \frac{Shareholder's Funds}{Total Assets} \times 100 \\ = \frac{13, 50, 000}{30, 00, 000} \times 100 = 45 % \end{array}$

Question 43:

$\begin{array}{l} Debt to Equity Ratio = \frac{Debt}{Equity} \\ = \frac{16, 50, 000 - 6, 00, 000}{13, 50, 000} = 0 .78 : 1 \\ Equity = Total Assets - Total Debts \\ = 30,00,000 - 16,50,000 = Rs 13,50,000 \end{array}$

$\begin{array}{l} Debt to Total Assets Ratio = \frac{Debt}{Total Assets} \\ = \frac{16, 50, 000 - 6, 00, 000}{30, 00, 000} = 0 .35 : 1 \end{array}$

$\begin{array}{l} Proprietary Ratio = \frac{Shareholder's Funds}{Total Assets} \times 100 \\ = \frac{13, 50, 000}{30, 00, 000} \times 100 = 45 % \end{array}$

Answer:

Shareholder’s Fund	=	Share Capital + Reserve and Surplus
	=	6, 00,000 + 1, 50,000
	=	Rs.7, 50,000

Debt	=	Long Term Borrowings + Long Term Provision
	=	Rs 1, 00,000

Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{1, 00, 000}{10, 00, 000} = 0.1 : 1

Question 44:

Shareholder’s Fund	=	Share Capital + Reserve and Surplus
	=	6, 00,000 + 1, 50,000
	=	Rs.7, 50,000

Debt	=	Long Term Borrowings + Long Term Provision
	=	Rs 1, 00,000

Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{1, 00, 000}{10, 00, 000} = 0.1 : 1

Answer:

Question 45:

Answer:

Profit before Interest & Tax	=	1, 70,000 + 30,000 + 40,000
	=	Rs 2, 40,000

Question 46:

Profit before Interest & Tax	=	1, 70,000 + 30,000 + 40,000
	=	Rs 2, 40,000

Answer:

Profit before Interest & Tax	=	75,000 + 9,000 + 5,000 + 5,000 (Interest on Debenture)
	=	Rs 94,000

Question 47:

Profit before Interest & Tax	=	75,000 + 9,000 + 5,000 + 5,000 (Interest on Debenture)
	=	Rs 94,000

Answer:

$Interest Coverage Ratio = \frac{Profit before Interest and Tax}{Interest on Long - term Debts} Interest Coverage Ratio = \frac{7, 20, 000 *}{1, 00, 000} = 7.2 Times * Profit after Interest but before Tax = 6, 20, 000 A d d : Interest = 1, 00, 000 Profit before Interest and Tax = Rs 7, 20, 000$

Question 48:

$Interest Coverage Ratio = \frac{Profit before Interest and Tax}{Interest on Long - term Debts} Interest Coverage Ratio = \frac{7, 20, 000 *}{1, 00, 000} = 7.2 Times * Profit after Interest but before Tax = 6, 20, 000 A d d : Interest = 1, 00, 000 Profit before Interest and Tax = Rs 7, 20, 000$

Answer:

Question 49:

Answer:

Question 50:

Answer:

Question 51:

Answer:

Question 52:

Answer:

Question 53:

Answer:

Cost of Goods Sold	=	Rs. 5,00,000
Gross Profit	=	5,00,000 × 20%
	=	Rs. 1,00,000

Sales	=	Cost of Goods Sold + Gross Profit
	=	5,00,000 + 1,00,000
	=	Rs. 6,00,000

Cash Sales	=	20% of 6,00,000 = Rs. 1,20,000
	=	6,00,000 – 1,20,000
	=	Rs. 4,80,000

Question 54:

Cost of Goods Sold	=	Rs. 5,00,000
Gross Profit	=	5,00,000 × 20%
	=	Rs. 1,00,000

Sales	=	Cost of Goods Sold + Gross Profit
	=	5,00,000 + 1,00,000
	=	Rs. 6,00,000

Cash Sales	=	20% of 6,00,000 = Rs. 1,20,000
	=	6,00,000 – 1,20,000
	=	Rs. 4,80,000

Answer:

$\begin{array}{l} Trade Receivables Turnover Ratio = \frac{Net Credit Revenue From Operations}{Average Trade Receivables} \\ = \frac{6, 00, 000}{1, 50, 000} = 4 times \\ Net Credit revenue From Operations = Collection from Trade Receivables + Discount Allowed + Closing Trade Receivables - Opening Trade Receivables \\ = 5,34,000 + 6,000 + 1,80,000 - 1,20,000 = Rs 6,00,000 \\ Average Trade Receivables = \frac{1, 20, 000 + 1, 80, 000}{2} = Rs 1,50,000 \end{array}$

Question 55:

$\begin{array}{l} Trade Receivables Turnover Ratio = \frac{Net Credit Revenue From Operations}{Average Trade Receivables} \\ = \frac{6, 00, 000}{1, 50, 000} = 4 times \\ Net Credit revenue From Operations = Collection from Trade Receivables + Discount Allowed + Closing Trade Receivables - Opening Trade Receivables \\ = 5,34,000 + 6,000 + 1,80,000 - 1,20,000 = Rs 6,00,000 \\ Average Trade Receivables = \frac{1, 20, 000 + 1, 80, 000}{2} = Rs 1,50,000 \end{array}$

Answer:

Question 56:

Answer:

$\begin{array}{l} Trade Receivable Turnover Ratio = \frac{Credit Revenue from Operations}{Average Trade Receivables} \\ 3 = \frac{3, 00, 000}{Average Trade Receivables} \\ Average Trade Receivables = \frac{3, 00, 000}{3} = Rs 1,00,000 \\ Average Trade Receivables = \frac{Opening Trade Receivables + Closing Trade Receivables}{2} \\ 1,00,000 = \frac{x + 4 x}{2} \\ So, x would be Rs 40,000 \\ ∴ Opening receivables would be Rs 40,000 and, \\ Closing Receivables would be Rs 1,60,000 (40, 000 \times 4) \\ Revenue from Operations = 3,00,000+ \frac{25}{75} \times 3, 00, 000 = Rs 4,00,000 \\ Credit Revenue from Operations = Total Revenue from Operations - Cash Revenue from Operations \\ x = 4,00,000- \frac{1}{3} x \\ Credit Revenue from Operations = Rs 3,00,000 \end{array}$

Question 57:

$\begin{array}{l} Trade Receivable Turnover Ratio = \frac{Credit Revenue from Operations}{Average Trade Receivables} \\ 3 = \frac{3, 00, 000}{Average Trade Receivables} \\ Average Trade Receivables = \frac{3, 00, 000}{3} = Rs 1,00,000 \\ Average Trade Receivables = \frac{Opening Trade Receivables + Closing Trade Receivables}{2} \\ 1,00,000 = \frac{x + 4 x}{2} \\ So, x would be Rs 40,000 \\ ∴ Opening receivables would be Rs 40,000 and, \\ Closing Receivables would be Rs 1,60,000 (40, 000 \times 4) \\ Revenue from Operations = 3,00,000+ \frac{25}{75} \times 3, 00, 000 = Rs 4,00,000 \\ Credit Revenue from Operations = Total Revenue from Operations - Cash Revenue from Operations \\ x = 4,00,000- \frac{1}{3} x \\ Credit Revenue from Operations = Rs 3,00,000 \end{array}$

Answer:

$\begin{array}{l} Trade Receivables Turnover Ratio = \frac{Net Credit Revenue From Operations}{Average Trade Receivables} \\ 3 = \frac{3, 00, 000}{Average Trade Receivables} \\ Average Trade Receivables = Rs 1,00,000 \\ 1,00,000 = \frac{\frac{1}{3} \times Closing Trade Receivables + Closing Trade Receivables}{2} \\ Closing Trade Receivables = 2, 00, 000 \times \frac{3}{4} = Rs 1,50,000 \\ Opening Trade Receivables = 1,50,000 \times \frac{1}{3} = Rs 50,000 \\ N o t e : \\ Revenue From Operations = Cost of revenue From Operations + Gross Profit \\ = 3,00,000 + 1,00,000 = Rs 4,00,000 \\ Gross Profit = 3,00,000 \times \frac{25}{75} = R s 1, 00, 000 \\ Revenue From Operations = Credit revenue From Operations + Cash revenue From Operations \\ 4,00,000 = Credit revenue From Operations + \frac{1}{3} \times Credit revenue From Operations \\ Credit revenue From Operations = 4, 00, 000 \times \frac{3}{4} = Rs 3,00,000 \end{array}$

Question 58:

$\begin{array}{l} Trade Receivables Turnover Ratio = \frac{Net Credit Revenue From Operations}{Average Trade Receivables} \\ 3 = \frac{3, 00, 000}{Average Trade Receivables} \\ Average Trade Receivables = Rs 1,00,000 \\ 1,00,000 = \frac{\frac{1}{3} \times Closing Trade Receivables + Closing Trade Receivables}{2} \\ Closing Trade Receivables = 2, 00, 000 \times \frac{3}{4} = Rs 1,50,000 \\ Opening Trade Receivables = 1,50,000 \times \frac{1}{3} = Rs 50,000 \\ N o t e : \\ Revenue From Operations = Cost of revenue From Operations + Gross Profit \\ = 3,00,000 + 1,00,000 = Rs 4,00,000 \\ Gross Profit = 3,00,000 \times \frac{25}{75} = R s 1, 00, 000 \\ Revenue From Operations = Credit revenue From Operations + Cash revenue From Operations \\ 4,00,000 = Credit revenue From Operations + \frac{1}{3} \times Credit revenue From Operations \\ Credit revenue From Operations = 4, 00, 000 \times \frac{3}{4} = Rs 3,00,000 \end{array}$

Answer:

Question 59:

Answer:

Question 60:

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Question 61:

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Question 62:

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Question 63:

Answer:

$\begin{array}{l} Trade Payables Turnover Ratio = \frac{Net Credit Purchases}{Average Trade Payables} \\ 3 = \frac{3, 00, 000}{Average Trade Payables} \\ Average Trade Payables = Rs 1,00,000 \\ 1,00,000 = \frac{Opening Trade Payables + 3 Opening Trade Payables}{2} \\ Opening Trade Payables = 2, 00, 000 \times \frac{1}{4} = Rs 50,000 \\ Closing Trade Payables = 50,000 \times 3 = Rs 1,50,000 \\ N o t e : \\ Cost of Revenue From Operations = Revenue From Operations - Gross Profit \\ = 4,00,000 - 1,00,000 = Rs 3,00,000 \\ Gross Profit = 4,00,000 \times \frac{25}{100} = R s 1, 00, 000 \\ Cost Revenue From Operations = Opening Inventory + Purchases-Closing Inventory \\ 3,00,000 = 5,00,000 + Purchases - 6,00,000 = Rs 4,00,000 \\ Cash Purchases = 4,00,000 \times \frac{1}{4} = R s 1, 00, 000 \\ Purchases = Cash Purchases + Credit Purchases \\ 4, 00, 000 = 1, 00, 000 + Credit Purchases \\ Credit Purchases = Rs 3,00,000 \end{array}$

Question 64:

$\begin{array}{l} Trade Payables Turnover Ratio = \frac{Net Credit Purchases}{Average Trade Payables} \\ 3 = \frac{3, 00, 000}{Average Trade Payables} \\ Average Trade Payables = Rs 1,00,000 \\ 1,00,000 = \frac{Opening Trade Payables + 3 Opening Trade Payables}{2} \\ Opening Trade Payables = 2, 00, 000 \times \frac{1}{4} = Rs 50,000 \\ Closing Trade Payables = 50,000 \times 3 = Rs 1,50,000 \\ N o t e : \\ Cost of Revenue From Operations = Revenue From Operations - Gross Profit \\ = 4,00,000 - 1,00,000 = Rs 3,00,000 \\ Gross Profit = 4,00,000 \times \frac{25}{100} = R s 1, 00, 000 \\ Cost Revenue From Operations = Opening Inventory + Purchases-Closing Inventory \\ 3,00,000 = 5,00,000 + Purchases - 6,00,000 = Rs 4,00,000 \\ Cash Purchases = 4,00,000 \times \frac{1}{4} = R s 1, 00, 000 \\ Purchases = Cash Purchases + Credit Purchases \\ 4, 00, 000 = 1, 00, 000 + Credit Purchases \\ Credit Purchases = Rs 3,00,000 \end{array}$

Answer:

$\begin{array}{l} Trade Payables Turnover Ratio = \frac{Net Credit Purchases}{Average Trade Payables} \\ 4 = \frac{3, 20, 000}{Average Trade Payables} \\ Average Trade Payables = Rs 80,000 \\ 80,000 = \frac{Opening Trade Payables + 4 Opening Trade Payables}{2} \\ Opening Trade Payables = 1, 60, 000 \times \frac{1}{5} = Rs 32,000 \\ Closing Trade Payables = 32,000 \times 4 = Rs 1,28,000 \\ N o t e : \\ Cost of Revenue From Operations = Revenue From Operations - Gross Profit \\ = 4,00,000 - 1,00,000 = Rs 3,00,000 \\ Gross Profit = 4,00,000 \times \frac{25}{100} = Rs 1, 00, 000 \\ Cost Revenue From Operations = Opening Inventory + Purchases - Closing Inventory \\ 3,00,000 = 5,00,000 + Purchases - 6,00,000 = Rs 4,00,000 \\ Purchases = Cash Purchases + Credit Purchases \\ 4, 00, 000 = \frac{1}{4} \times Credit Purchases + Credit Purchases \\ Credit Purchases = Rs 3,20,000 \end{array}$

Question 65:

$\begin{array}{l} Trade Payables Turnover Ratio = \frac{Net Credit Purchases}{Average Trade Payables} \\ 4 = \frac{3, 20, 000}{Average Trade Payables} \\ Average Trade Payables = Rs 80,000 \\ 80,000 = \frac{Opening Trade Payables + 4 Opening Trade Payables}{2} \\ Opening Trade Payables = 1, 60, 000 \times \frac{1}{5} = Rs 32,000 \\ Closing Trade Payables = 32,000 \times 4 = Rs 1,28,000 \\ N o t e : \\ Cost of Revenue From Operations = Revenue From Operations - Gross Profit \\ = 4,00,000 - 1,00,000 = Rs 3,00,000 \\ Gross Profit = 4,00,000 \times \frac{25}{100} = Rs 1, 00, 000 \\ Cost Revenue From Operations = Opening Inventory + Purchases - Closing Inventory \\ 3,00,000 = 5,00,000 + Purchases - 6,00,000 = Rs 4,00,000 \\ Purchases = Cash Purchases + Credit Purchases \\ 4, 00, 000 = \frac{1}{4} \times Credit Purchases + Credit Purchases \\ Credit Purchases = Rs 3,20,000 \end{array}$

Answer:

$Working Capital Turnover Ratio = \frac{Revenue from Operations}{Working Capital} Working Capital Turnover Ratio = \frac{21, 00, 000}{3, 50, 000} = 6 Times Revenue from Operations = Sales - Sales Return Revenue from Operations = 23, 00, 000 - 2, 00, 000 = Rs 21, 00, 000 Working Capital = Current Assets - Current Liabilities Working Capital = 6, 00, 000 - 2, 50, 000 = Rs 3, 50, 000 Current Assets = Marketable Securities + Inventory + Sundry Debtors + Bills Receivable + Cash at Bank + Cash in Hand Current Assets = 1, 50, 000 + 50, 000 + 2, 00, 000 + 50, 000 + 1, 00, 000 + 50, 000 = Rs 6, 00, 000 Current Liabilities = Bills Payable + Sundry Creditors + Provision for Tax Current Liabilities = 30, 000 + 2, 00, 000 + 20, 000 = Rs 2, 50, 000$

Question 66:

$Working Capital Turnover Ratio = \frac{Revenue from Operations}{Working Capital} Working Capital Turnover Ratio = \frac{21, 00, 000}{3, 50, 000} = 6 Times Revenue from Operations = Sales - Sales Return Revenue from Operations = 23, 00, 000 - 2, 00, 000 = Rs 21, 00, 000 Working Capital = Current Assets - Current Liabilities Working Capital = 6, 00, 000 - 2, 50, 000 = Rs 3, 50, 000 Current Assets = Marketable Securities + Inventory + Sundry Debtors + Bills Receivable + Cash at Bank + Cash in Hand Current Assets = 1, 50, 000 + 50, 000 + 2, 00, 000 + 50, 000 + 1, 00, 000 + 50, 000 = Rs 6, 00, 000 Current Liabilities = Bills Payable + Sundry Creditors + Provision for Tax Current Liabilities = 30, 000 + 2, 00, 000 + 20, 000 = Rs 2, 50, 000$

Answer:

Question 67:

Answer:

Question 68:

Answer:

Question 69:

Answer:

Question 70:

Answer:

Question 71:

Answer:

$\begin{array}{l} Inventory Turnover Ratio = \frac{Cost of Revenue From Operations}{Average Inventory} \\ = \frac{9, 00, 000}{1, 50, 000} = 6 times \\ Average Inventory = \frac{1,00,0000 + 2, 00, 000}{2} = Rs 1,50,000 \\ Cost of Revenue From Operations = Revenue From Operations - Gross Profit \\ =11,25,000 - 2,25,000 = Rs 9,00,000 \\ Gross Profit = 11,25,000 \times \frac{25}{125} = Rs 2, 25, 000 \end{array}$

Question 72:

$\begin{array}{l} Inventory Turnover Ratio = \frac{Cost of Revenue From Operations}{Average Inventory} \\ = \frac{9, 00, 000}{1, 50, 000} = 6 times \\ Average Inventory = \frac{1,00,0000 + 2, 00, 000}{2} = Rs 1,50,000 \\ Cost of Revenue From Operations = Revenue From Operations - Gross Profit \\ =11,25,000 - 2,25,000 = Rs 9,00,000 \\ Gross Profit = 11,25,000 \times \frac{25}{125} = Rs 2, 25, 000 \end{array}$

Answer:

Question 73:

Answer:

Question 74:

Answer:

Question 75:

Answer:

Let Cost of Goods Sold be = x

Cost of Goods Sold = x = Rs 3,84,000

Cost of Goods Sold = Opening Inventory (Stock) + Purchases − Closing Inventory (Stock)

3,84,000 = Opening Inventory + 3,60,000 − 68,000

Opening Inventory = 3,84,000 − 2,92,000 = Rs 92,000

Question 76:

Let Cost of Goods Sold be = x

Cost of Goods Sold = x = Rs 3,84,000

Cost of Goods Sold = Opening Inventory (Stock) + Purchases − Closing Inventory (Stock)

3,84,000 = Opening Inventory + 3,60,000 − 68,000

Opening Inventory = 3,84,000 − 2,92,000 = Rs 92,000

Answer:

Sales = 2,00,000

Gross Profit = 25% on Sales

Cost of Goods Sold = Total Sales − Gross Profit

= 2,00,000 − 50,000 = 1,50,000

Let Opening Inventory = x

Closing Inventory = x + 4,000

Opening Inventory = x = Rs 28,000

Closing Inventory = x + 4,000 = 28,000 + 4,000 = Rs 32,000

Question 77:

Sales = 2,00,000

Gross Profit = 25% on Sales

Cost of Goods Sold = Total Sales − Gross Profit

= 2,00,000 − 50,000 = 1,50,000

Let Opening Inventory = x

Closing Inventory = x + 4,000

Opening Inventory = x = Rs 28,000

Closing Inventory = x + 4,000 = 28,000 + 4,000 = Rs 32,000

Answer:

Question 78:

Answer:

Question 79:

Answer:

Question 80:

Answer:

$\begin{array}{l} Inventory Turnover Ratio = \frac{Cost of Revenue From Operations}{Average Inventory} \\ 8 = \frac{Cost of Revenue From Operations}{48, 000} \\ Cost of Revenue From Operations = Rs 3,84,000 \\ Cost of Revenue From Operations = Revenue From Operations - Gross Profit \\ 3,84,000 = Revenue From Operations - 96,000 \\ Revenue From Operations = Rs 4,80,000 \\ Gross Profit = 3,84,000 \times \frac{25}{100} = R s 96, 000 \\ Average Inventory = \frac{60,0000 + 36, 000}{2} = Rs 48,000 \\ Gross Profit Ratio = \frac{Gross Profit}{Revenue From Operations} \times 100 \\ = \frac{96, 000}{4, 80, 000} \times 100 = 20 % \end{array}$

Question 81:

$\begin{array}{l} Inventory Turnover Ratio = \frac{Cost of Revenue From Operations}{Average Inventory} \\ 8 = \frac{Cost of Revenue From Operations}{48, 000} \\ Cost of Revenue From Operations = Rs 3,84,000 \\ Cost of Revenue From Operations = Revenue From Operations - Gross Profit \\ 3,84,000 = Revenue From Operations - 96,000 \\ Revenue From Operations = Rs 4,80,000 \\ Gross Profit = 3,84,000 \times \frac{25}{100} = R s 96, 000 \\ Average Inventory = \frac{60,0000 + 36, 000}{2} = Rs 48,000 \\ Gross Profit Ratio = \frac{Gross Profit}{Revenue From Operations} \times 100 \\ = \frac{96, 000}{4, 80, 000} \times 100 = 20 % \end{array}$

Answer:

Question 82:

Answer:

Question 83:

Answer:

Question 84:

Answer:

Question 85:

Answer:

$G i v e n : Operating Cost = Rs 3, 40, 000 Operating Expenses = Rs 40, 000 Gross Profit Ratio = 25 % F i n d o u t : Operating Ratio Operating Cost = Cost of Revenue from Operations + Operating Expenses 3, 40, 000 = Cost of Revenue from Operations + 40, 000 Cost of Revenue from Operations = Rs 3, 00, 000 Gross Profit = \frac{1}{4} th of sales = \frac{1}{3} rd of cost Gross Profit = \frac{1}{3} \times 3, 00, 000 = Rs 1, 00, 000 Gross Profit Ratio = \frac{Gross Profit}{Net Sales} \times 100 25 = \frac{1, 00, 000}{Net Sales} \times 100 Net Sales = Rs 4, 00, 000 Operating Ratio = \frac{Operating Cost}{Net Sales} \times 100 = \frac{3, 40, 000}{4, 00, 000} \times 100 = 85 %$

Question 86:

$G i v e n : Operating Cost = Rs 3, 40, 000 Operating Expenses = Rs 40, 000 Gross Profit Ratio = 25 % F i n d o u t : Operating Ratio Operating Cost = Cost of Revenue from Operations + Operating Expenses 3, 40, 000 = Cost of Revenue from Operations + 40, 000 Cost of Revenue from Operations = Rs 3, 00, 000 Gross Profit = \frac{1}{4} th of sales = \frac{1}{3} rd of cost Gross Profit = \frac{1}{3} \times 3, 00, 000 = Rs 1, 00, 000 Gross Profit Ratio = \frac{Gross Profit}{Net Sales} \times 100 25 = \frac{1, 00, 000}{Net Sales} \times 100 Net Sales = Rs 4, 00, 000 Operating Ratio = \frac{Operating Cost}{Net Sales} \times 100 = \frac{3, 40, 000}{4, 00, 000} \times 100 = 85 %$

Answer:

$\begin{array}{l} Operating Ratio = \frac{Cost of Revenue from Operations + Operating Expenses}{Revenue from Operations} \times 100 \\ = \frac{3, 60, 000 + 45, 000}{4, 50, 000} \times 100 = 90 % \\ Cost of Revenue from Operations = Revenue from Operations - Gross Profit \\ = 4, 50,000 - 90,000 = Rs 3,60,000 \\ Gross Profit = 4,50,000 \times \frac{25}{125} % = Rs 90,000 \end{array}$

Question 87:

$\begin{array}{l} Operating Ratio = \frac{Cost of Revenue from Operations + Operating Expenses}{Revenue from Operations} \times 100 \\ = \frac{3, 60, 000 + 45, 000}{4, 50, 000} \times 100 = 90 % \\ Cost of Revenue from Operations = Revenue from Operations - Gross Profit \\ = 4, 50,000 - 90,000 = Rs 3,60,000 \\ Gross Profit = 4,50,000 \times \frac{25}{125} % = Rs 90,000 \end{array}$

Answer:

Question 88:

Answer:

Question 89:

Answer:

Question 90:

Answer:

Question 91:

Answer:

$\begin{array}{l} Earning Per Share = \frac{Earning Available to Equity Shareholders}{Number of Equity Shares} \\ = \frac{2, 70, 000 - 27, 000}{80, 000} = Rs 3.04 per share \\ Price-Earning Ratio = \frac{Market Price Per Share}{Earning Per Share} = \frac{40}{3 .04} = 13 .16 times \\ Note : Dividend on Preference Shares = Rs 27, 000 (9 % of 3, 00, 000) \end{array}$

Question 92:

$\begin{array}{l} Earning Per Share = \frac{Earning Available to Equity Shareholders}{Number of Equity Shares} \\ = \frac{2, 70, 000 - 27, 000}{80, 000} = Rs 3.04 per share \\ Price-Earning Ratio = \frac{Market Price Per Share}{Earning Per Share} = \frac{40}{3 .04} = 13 .16 times \\ Note : Dividend on Preference Shares = Rs 27, 000 (9 % of 3, 00, 000) \end{array}$

Answer:

Net Profit after Tax (as per Statement of Profit and Loss) = 45,000

Provision for Taxation = 10,000

Net Profit before Interest and Tax = 45,000 + 10,000 = 55,000

Capital Employed = Share Capital + Reserves and Surplus + Long-term Borrowings

= 2,00,000 + 1,00,000 + 1,00,000 = 4,00,000

Question 93:

Net Profit after Tax (as per Statement of Profit and Loss) = 45,000

Provision for Taxation = 10,000

Net Profit before Interest and Tax = 45,000 + 10,000 = 55,000

Capital Employed = Share Capital + Reserves and Surplus + Long-term Borrowings

= 2,00,000 + 1,00,000 + 1,00,000 = 4,00,000

Answer:

Net Fixed Assets = Fixed Assets (at cost) − Accumulated Depreciation

= 22,50,000 − 2,50,000 = 20,00,000

Capital Employed = Net Fixed Assets + Current Assets − Current Liabilities

= 20,00,000 + 12,00,000 − 4,00,000

= 28,00,000

Interest on 10% Debentures = 10% of 10,00,000 = 1,00,000

Let Profit before Tax be = x

Profit after Tax = Profit Before Tax − Tax

Tax Rate = 50%

∴ Tax = 0.5 x

x − 0.5 x = 6,50,000

x = 13,00,000

Net Profit before Tax = x = 13,00,000

Profit before Interest and Tax = Profit before Tax + Interest on Long-term Debt

= 13,00,000 + 1,00,000

= 14,00,000

Question 94:

Net Fixed Assets = Fixed Assets (at cost) − Accumulated Depreciation

= 22,50,000 − 2,50,000 = 20,00,000

Capital Employed = Net Fixed Assets + Current Assets − Current Liabilities

= 20,00,000 + 12,00,000 − 4,00,000

= 28,00,000

Interest on 10% Debentures = 10% of 10,00,000 = 1,00,000

Let Profit before Tax be = x

Profit after Tax = Profit Before Tax − Tax

Tax Rate = 50%

∴ Tax = 0.5 x

x − 0.5 x = 6,50,000

x = 13,00,000

Net Profit before Tax = x = 13,00,000

Profit before Interest and Tax = Profit before Tax + Interest on Long-term Debt

= 13,00,000 + 1,00,000

= 14,00,000

Answer:

Net Profit before Interest and Tax = 2,50,000

Capital Employed = 10,00,000

Question 95:

Net Profit before Interest and Tax = 2,50,000

Capital Employed = 10,00,000

Answer:

Net Profit before Interest and Tax = 6,00,000

Capital Employed = Net Fixed Assets + Net Working Capital

= 20,00,000 + 10,00,000 = 30,00,000

Question 96:

Net Profit before Interest and Tax = 6,00,000

Capital Employed = Net Fixed Assets + Net Working Capital

= 20,00,000 + 10,00,000 = 30,00,000

Answer:

Net Profit before Interest and Tax = 4,00,000

Capital Employed = 15% long-term Debt + Shareholders’ Funds

= 8,00,000 + 4,00,000 = 12,00,000

Question 97:

Net Profit before Interest and Tax = 4,00,000

Capital Employed = 15% long-term Debt + Shareholders’ Funds

= 8,00,000 + 4,00,000 = 12,00,000

Answer:

Question 98:

Answer:

Question 99:

Answer:

Question 100:

Answer:

Question 101:

Answer:

Question 102:

Answer:

Question 103:

Answer:

Question 104:

Answer:

$\begin{array}{l} Inventory Turnover Ratio = \frac{Cost of Revenue From Operations}{Average Inventory} \\ 4 = \frac{2, 25, 000}{Average Inventory} \\ Average Inventory = Rs 56,250 \\ Average Inventory = \frac{Opening Inventory + Closing Inventory}{2} \\ 56, 250 = \frac{Opening Inventory + (Opening Inventory + 20, 000)}{2} \\ Opening Inventory = Rs 46,250 \\ Closing Inventory = Rs 66,250 \\ Quick Ratio = \frac{Current Assets - Closing Inventory}{Current Liabilities} \\ 0 .75 = \frac{Current Assets - 66, 250}{40, 000} \\ Current Assets = Rs 96,250 \end{array}$

Question 105:

$\begin{array}{l} Inventory Turnover Ratio = \frac{Cost of Revenue From Operations}{Average Inventory} \\ 4 = \frac{2, 25, 000}{Average Inventory} \\ Average Inventory = Rs 56,250 \\ Average Inventory = \frac{Opening Inventory + Closing Inventory}{2} \\ 56, 250 = \frac{Opening Inventory + (Opening Inventory + 20, 000)}{2} \\ Opening Inventory = Rs 46,250 \\ Closing Inventory = Rs 66,250 \\ Quick Ratio = \frac{Current Assets - Closing Inventory}{Current Liabilities} \\ 0 .75 = \frac{Current Assets - 66, 250}{40, 000} \\ Current Assets = Rs 96,250 \end{array}$

Answer:

Let Debt to be Rs. 2, 00,000 and Equity = Rs. 1, 00,000

a) Sale of Land book value Rs. 5,00,000, So

b) Issue of Share for Purchase of Plant& Machinery Rs. 10,00,000, So

c) Issue of Preference Shares for Payment of Redemption say Rs. 50,000, So

Question 106:

Let Debt to be Rs. 2, 00,000 and Equity = Rs. 1, 00,000

a) Sale of Land book value Rs. 5,00,000, So

b) Issue of Share for Purchase of Plant& Machinery Rs. 10,00,000, So

c) Issue of Preference Shares for Payment of Redemption say Rs. 50,000, So

Answer:

Debt	=	Total Debts – Current Liabilities
	=	10, 00,000 – 5, 00,000
	=	Rs. 5, 00,000

Equity	=	Total Assets – Current Liabilities – Total Debts
	=	12, 50,000 – 10,00,0000
	=	Rs. 2, 50,000

Question 107:

Debt	=	Total Debts – Current Liabilities
	=	10, 00,000 – 5, 00,000
	=	Rs. 5, 00,000

Equity	=	Total Assets – Current Liabilities – Total Debts
	=	12, 50,000 – 10,00,0000
	=	Rs. 2, 50,000

Answer:

Debt	=	Long Term Borrowings + Long Term Provision
	=	1, 10,000 + 20,000
	=	Rs 1, 30,000

Equity	=	Share Capital + Reserve and Surplus
	=	5, 00,000 + 1, 00,000 + 40,000
	=	Rs 6, 40,000

Question 108:

Debt	=	Long Term Borrowings + Long Term Provision
	=	1, 10,000 + 20,000
	=	Rs 1, 30,000

Equity	=	Share Capital + Reserve and Surplus
	=	5, 00,000 + 1, 00,000 + 40,000
	=	Rs 6, 40,000

Answer:

Debt	=	Long Term Borrowings + Long Term Provision
	=	2, 00,000 + 50,000
	=	Rs 2, 50,000

Equity	=	Share Capital + Reserve and Surplus
	=	10, 00,000 + 2, 40,000
	=	Rs 12, 40,000

Question 109:

Debt	=	Long Term Borrowings + Long Term Provision
	=	2, 00,000 + 50,000
	=	Rs 2, 50,000

Equity	=	Share Capital + Reserve and Surplus
	=	10, 00,000 + 2, 40,000
	=	Rs 12, 40,000

Answer:

Debt	=	Long Term Borrowings + Long Term Provision
	=	Rs 30, 00,000

Equity	=	Share Capital + Reserve and Surplus
	=	5, 00,000 + 15, 00,000 + 1, 00,000 + 4, 00,000
	=	Rs 25, 00,000

Question 110:

Debt	=	Long Term Borrowings + Long Term Provision
	=	Rs 30, 00,000

Equity	=	Share Capital + Reserve and Surplus
	=	5, 00,000 + 15, 00,000 + 1, 00,000 + 4, 00,000
	=	Rs 25, 00,000

Answer:

$(i) Debt to Equity Ratio = \frac{Debt}{Equity} = \frac{3, 00, 000}{12, 00, 000} = 1 : 4$

$(ii) Proprietary Ratio = \frac{Shareholders' Funds}{Total Assets} = \frac{12, 00, 000}{18, 00, 000} \times 100 = 66.67 %$

$(iii) Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{3, 00, 000}{18, 00, 00} = 0.17 : 1$

Debt	=	Long Term Borrowings + Long Term Provision
	=	2, 60,000 + 40,000
	=	Rs 3, 00,000

Question 111:

$(i) Debt to Equity Ratio = \frac{Debt}{Equity} = \frac{3, 00, 000}{12, 00, 000} = 1 : 4$

$(ii) Proprietary Ratio = \frac{Shareholders' Funds}{Total Assets} = \frac{12, 00, 000}{18, 00, 000} \times 100 = 66.67 %$

$(iii) Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{3, 00, 000}{18, 00, 00} = 0.17 : 1$

Debt	=	Long Term Borrowings + Long Term Provision
	=	2, 60,000 + 40,000
	=	Rs 3, 00,000

Answer:

$\begin{array}{l} Debt to Equity Ratio = \frac{Debt}{Equity} \\ = \frac{2, 00, 000}{7, 00, 000} = 0 .29 : 1 \\ Equity = Equity Share Capital + Reserve & Surplus \\ =5,50,000 + 50,000 + 1,00,000 = Rs 7,00,000 \end{array}$

$\begin{array}{l} Working Capital Turnover Ratio = \frac{Revenue from Operations}{Working Capital} \\ = \frac{15, 00, 000}{1, 00, 000} = 15 times \\ Working capital = (1, 45, 0000 + 55, 0000) - 1, 00, 000 = Rs 1,00,000 \end{array}$

$\begin{array}{l} Return on Investment = \frac{Profit Before Interest & Tax}{Capital Employed} \times 100 \\ = \frac{2, 18, 000}{9, 00, 000} \times 100 = 24 .22 % \\ Capital Employed = Non-Current Assets + Current Assets - Current Liabilities \\ = 6,50,000 + 1,50,000 + 2,00,000 - 1,00,000 = Rs 9,00,000 \\ Profit before Tax and Interest = Profit after Tax + Tax + Interest \\ = 1, 00, 000 + 1, 00, 000 + 18, 000 = Rs 2, 18, 000 \end{array}$

Question 112:

$\begin{array}{l} Debt to Equity Ratio = \frac{Debt}{Equity} \\ = \frac{2, 00, 000}{7, 00, 000} = 0 .29 : 1 \\ Equity = Equity Share Capital + Reserve & Surplus \\ =5,50,000 + 50,000 + 1,00,000 = Rs 7,00,000 \end{array}$

$\begin{array}{l} Working Capital Turnover Ratio = \frac{Revenue from Operations}{Working Capital} \\ = \frac{15, 00, 000}{1, 00, 000} = 15 times \\ Working capital = (1, 45, 0000 + 55, 0000) - 1, 00, 000 = Rs 1,00,000 \end{array}$

$\begin{array}{l} Return on Investment = \frac{Profit Before Interest & Tax}{Capital Employed} \times 100 \\ = \frac{2, 18, 000}{9, 00, 000} \times 100 = 24 .22 % \\ Capital Employed = Non-Current Assets + Current Assets - Current Liabilities \\ = 6,50,000 + 1,50,000 + 2,00,000 - 1,00,000 = Rs 9,00,000 \\ Profit before Tax and Interest = Profit after Tax + Tax + Interest \\ = 1, 00, 000 + 1, 00, 000 + 18, 000 = Rs 2, 18, 000 \end{array}$

Answer:

$\begin{array}{l} Operating Ratio = \frac{Cost of Revenue from Operations + Operating Expenses}{Revenue from Operations} \times 100 \\ = \frac{13, 20, 000 + 2, 20, 000}{22, 00, 000} \times 100 = 70 % \\ Cost of Revenue from Operations = Revenue from Operations - Gross Profit \\ = 10, 00,000 +12,00,000 - 8,80,000 = Rs 13,20,000 \\ Gross Profit = 22,00,000 \times 40 % = 8, 80, 000 \end{array}$

$\begin{array}{l} Inventory Turnover Ratio = \frac{Cost of Revenue From Operations}{Average Inventory} \\ = \frac{13, 20, 000}{1, 60, 000} = 8 .25 times \\ Average Inventory = \frac{1,50,000 + 1,70,000}{2} = Rs 1,60,000 \end{array}$

$\begin{array}{l} Proprietary Ratio = \frac{Shareholder's Funds}{Total Assets} \times 100 \\ = \frac{6, 00, 000}{8, 00, 000} \times 100 = 75 % \\ Shareholder's Funds/Equity = Non-Current Assets + Working Capital - Non-Current Liabilities \\ = 5,00,000 + 1,00,000 = Rs 6,00,000 \end{array}$

Question 113:

$\begin{array}{l} Operating Ratio = \frac{Cost of Revenue from Operations + Operating Expenses}{Revenue from Operations} \times 100 \\ = \frac{13, 20, 000 + 2, 20, 000}{22, 00, 000} \times 100 = 70 % \\ Cost of Revenue from Operations = Revenue from Operations - Gross Profit \\ = 10, 00,000 +12,00,000 - 8,80,000 = Rs 13,20,000 \\ Gross Profit = 22,00,000 \times 40 % = 8, 80, 000 \end{array}$

$\begin{array}{l} Inventory Turnover Ratio = \frac{Cost of Revenue From Operations}{Average Inventory} \\ = \frac{13, 20, 000}{1, 60, 000} = 8 .25 times \\ Average Inventory = \frac{1,50,000 + 1,70,000}{2} = Rs 1,60,000 \end{array}$

$\begin{array}{l} Proprietary Ratio = \frac{Shareholder's Funds}{Total Assets} \times 100 \\ = \frac{6, 00, 000}{8, 00, 000} \times 100 = 75 % \\ Shareholder's Funds/Equity = Non-Current Assets + Working Capital - Non-Current Liabilities \\ = 5,00,000 + 1,00,000 = Rs 6,00,000 \end{array}$

Answer:

Question 114:

Answer:

Question 115:

Answer:

Question 116:

Answer:

(A)

(B)

Question 117:

(A)

(B)

Answer:

Question 118:

Answer:

Question 119:

Answer:

$Inventory Turnover Ratio (2015) = \frac{Cost of Revenue from Operations}{Average Stock} or, Inventory Turnover Ratio (2015) = \frac{42, 000}{14, 000} = 3 Times$

$Inventory Turnover Ratio (2016) = \frac{Cost of Revenue from Operations}{Average Stock} or, Inventory Turnover Ratio (2016) = \frac{50, 000}{20, 000} = 2.5 Times$

Question 120:

$Inventory Turnover Ratio (2015) = \frac{Cost of Revenue from Operations}{Average Stock} or, Inventory Turnover Ratio (2015) = \frac{42, 000}{14, 000} = 3 Times$

$Inventory Turnover Ratio (2016) = \frac{Cost of Revenue from Operations}{Average Stock} or, Inventory Turnover Ratio (2016) = \frac{50, 000}{20, 000} = 2.5 Times$

Answer:

Question 121:

Answer:

Question 122:

Answer:

Question 123:

Answer:

Question 124:

Answer:

Question 125:

Answer:

Question 126:

Answer:

(A)

(B)

Question 127:

(A)

(B)

Answer:

Question 128:

Answer:

Question 129:

Answer:

Question 130:

Answer:

Current Assets	=	Debtors + Prepaid Expenses + Cash + Marketable Securities + Inventory
	=	2, 00,000 + 20,000 + 60,000 + 40,000 + 80,000
	=	Rs 4, 00,000

Current Liabilities	=	Bills Payables + Creditors + Expenses Payables
	=	40,000 + 80,000 + 80,000
	=	Rs 2, 00,000

Question 131:

Current Assets	=	Debtors + Prepaid Expenses + Cash + Marketable Securities + Inventory
	=	2, 00,000 + 20,000 + 60,000 + 40,000 + 80,000
	=	Rs 4, 00,000

Current Liabilities	=	Bills Payables + Creditors + Expenses Payables
	=	40,000 + 80,000 + 80,000
	=	Rs 2, 00,000

Answer:

Question 132:

Answer:

Question 133:

Answer:

Question 134:

Answer:

$\begin{array}{l} Return on Investment = \frac{Profit Before Interest & Tax}{Capital Employed} \times 100 \\ = \frac{14, 50, 000}{88, 00, 000} = 16 .48 % \\ Capital Employed = Non-Current Assets + Current Assets - Current Liabilities \\ = 75,00,000 + 40,00,000 - 27,00,000 = Rs 88,00,000 \end{array}$

$\begin{array}{l} Debt to Total Asset Ratio = \frac{Debt}{Total Assets} \\ = \frac{80, 00, 000}{1, 15, 00, 000} = 0 .6956 : 1 \\ Debt = 12 % Debentures = Rs 80, 00, 000 \\ Total Assets = Fixed Assets + Current Assets = 75, 00, 000 + 40, 00, 000 \\ = Rs 1, 15, 00, 000 \end{array}$

Question 135:

$\begin{array}{l} Return on Investment = \frac{Profit Before Interest & Tax}{Capital Employed} \times 100 \\ = \frac{14, 50, 000}{88, 00, 000} = 16 .48 % \\ Capital Employed = Non-Current Assets + Current Assets - Current Liabilities \\ = 75,00,000 + 40,00,000 - 27,00,000 = Rs 88,00,000 \end{array}$

$\begin{array}{l} Debt to Total Asset Ratio = \frac{Debt}{Total Assets} \\ = \frac{80, 00, 000}{1, 15, 00, 000} = 0 .6956 : 1 \\ Debt = 12 % Debentures = Rs 80, 00, 000 \\ Total Assets = Fixed Assets + Current Assets = 75, 00, 000 + 40, 00, 000 \\ = Rs 1, 15, 00, 000 \end{array}$

Answer:

$\begin{array}{l} Return on Investment = \frac{Profit Before Interest & Tax}{Capital Employed} \times 100 \\ = \frac{2, 00, 000}{6, 40, 000} = 31 .25 % \\ Capital Employed = Shareholders' Funds + Long Term Debts \\ =2,40,000 + 4,00,000 = Rs 6,40,000 \\ Profit Before Interest & Tax = 1, 40, 000 + 60, 000 = Rs 2,00,000 \end{array}$

Question 136:

$\begin{array}{l} Return on Investment = \frac{Profit Before Interest & Tax}{Capital Employed} \times 100 \\ = \frac{2, 00, 000}{6, 40, 000} = 31 .25 % \\ Capital Employed = Shareholders' Funds + Long Term Debts \\ =2,40,000 + 4,00,000 = Rs 6,40,000 \\ Profit Before Interest & Tax = 1, 40, 000 + 60, 000 = Rs 2,00,000 \end{array}$

Answer:

$\begin{array}{l} Return on Investment = \frac{Profit Before Interest & Tax}{Capital Employed} \times 100 \\ = \frac{11, 00, 000}{80, 00, 000} = 13 .75 % \\ Profit Before Interest & Tax = 6, 00, 000 + 4, 00, 000 (6, 00, 000 \times \frac{40}{60}) + 1, 00, 000 = Rs 11,00,000 \end{array}$

Question 137:

$\begin{array}{l} Return on Investment = \frac{Profit Before Interest & Tax}{Capital Employed} \times 100 \\ = \frac{11, 00, 000}{80, 00, 000} = 13 .75 % \\ Profit Before Interest & Tax = 6, 00, 000 + 4, 00, 000 (6, 00, 000 \times \frac{40}{60}) + 1, 00, 000 = Rs 11,00,000 \end{array}$

Answer:

Current Assets	=	Debtors + Stock + Cash
	=	10,000 + 15,000 + 15,000
	=	Rs. 40,000

Current Liabilities	=	Bills Payables + Creditors
	=	6,000 + 14,000
	=	Rs. 20,000

Question 138:

Current Assets	=	Debtors + Stock + Cash
	=	10,000 + 15,000 + 15,000
	=	Rs. 40,000

Current Liabilities	=	Bills Payables + Creditors
	=	6,000 + 14,000
	=	Rs. 20,000

Answer:

(A)

(B)

(C)

Question 139:

(A)

(B)

(C)

Answer:

(A)

(B)

(C)

(D)

$Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{1, 00, 000}{3, 50, 000} = 0.29 : 1$

(E)

Question 140:

(A)

(B)

(C)

(D)

$Debt to Total Assets Ratio = \frac{Debt}{Total Assets} = \frac{1, 00, 000}{3, 50, 000} = 0.29 : 1$

(E)

Answer:

(A)

(B)

(C)

(D)

Question 141:

(A)

(B)

(C)

(D)

Answer:

(A)

(B)

(C)

Question 142:

(A)

(B)

(C)

Answer:

(A)

(B)

$Debts to Total Assets Ratio = \frac{Debts}{Total Assets} = \frac{25, 000}{1, 75, 000} = 0.143 : 1$

(C)

(D)

(E)

Question 143:

(A)

(B)

$Debts to Total Assets Ratio = \frac{Debts}{Total Assets} = \frac{25, 000}{1, 75, 000} = 0.143 : 1$

(C)

(D)

(E)

Answer:

(A)

(B)

(C)

Question 144:

(A)

(B)

(C)

Answer:

1.
$\begin{array}{l} Inventory Turnover Ratio = \frac{Cost of Revenue From Operations}{Average Inventory} \\ = \frac{3, 15, 000}{29,500} = 10 .68 times \\ Average Inventory = \frac{Opening Inventory + Closing Inventory}{2} \\ = \frac{24, 000 + 35, 000}{2} = Rs 29,500 \\ Cost of Revenue From Operations = Opening Inventory + P u r c h a s e s - Closing Inventory \\ = 24, 000 + 3, 26, 000 - 35, 000 = Rs 3,15,000 \end{array}$

2.
$\begin{array}{l} Gross Profit Ratio = \frac{Gross Profit}{Revenue From Operations} \times 100 \\ = \frac{2, 25, 000}{5, 40, 000} \times 100 = 41 .67 % \\ Gross Profit = Revenue From Operations - C o s t o f Revenue From Operations \\ = 5, 40, 000 - 3, 15, 000 = Rs 2,25,000 \end{array}$

3.
$\begin{array}{l} Working Capital Turnover Ratio = \frac{Revenue From Operations}{Working Capital} \times 100 \\ = \frac{5, 40, 000}{2, 350} = 229.79 times \\ Working Capital = Current Assets - Current Liabilities \\ = 1, 01, 900 - 99, 550 = Rs 2, 350 \end{array}$

4.
$\begin{array}{l} Current Ratio = \frac{Current Assets}{Current Liabilities} \\ = \frac{1,01,900}{99,550} = 1 .024 :1 \end{array}$

5.
$\begin{array}{l} Quick Ratio = \frac{Quick Assets}{Current Liabilities} \\ = \frac{1,01,900 - 35,000}{99, 550} = 0 .67 :1 \end{array}$

6.
$\begin{array}{l} Net Profit Ratio= \frac{Net Profit}{Revenue From Operations} \times 100 \\ = \frac{98, 000}{5, 40, 000} \times 100 = 18 .15 % \end{array}$

7.
$\begin{array}{l} Debt to Equity Ratio = \frac{Debt}{Equity} \\ = \frac{40, 000}{2, 66, 700} = 0 .15 : 1 \\ Equity = Share Capital + Reserve & Surplus \\ =1,85,000+81,700 = Rs 2,66,700 \end{array}$

8.
$\begin{array}{l} Trade Receivables Turnover Ratio = \frac{Net Credit revenue From Operations}{Average Trade Receivables} \\ = \frac{3, 24, 000}{50, 000} = 6 .48 times \\ Net Credit revenue From Operations = 5, 40, 000 \times \frac{60}{100} =Rs 3,24,000 \\ Average Inventory = \frac{Opening Inventory + Closing Inventory}{2} \\ Average Trade Receivables = \frac{54, 000 + 46, 000}{2} = Rs 50,000 \end{array}$

9.
$\begin{array}{l} Proprietary Ratio = \frac{Shareholder' s Funds}{Total Assets} \times 100 \\ = \frac{2, 66, 700}{4, 06, 250} = 0.66 : 1 \\ Shareholder' s Funds = Share Capital + Reserves and Surplus \\ = 1, 85, 000 + 81, 700 = Rs 2, 66, 700 \end{array}$

10.
$\begin{array}{l} Debt to Total Assets Ratio = \frac{Debt}{Total Assets} \\ = \frac{40, 000}{4, 06, 250} = 0 .098 : 1 \end{array}$

11.
$\begin{array}{l} Earning Per Share = \frac{Earning Available to Equity Shareholders}{Number of Equity Shares} \\ = \frac{98, 000 - 4, 800}{12, 500} = Rs 7.456 per share \\ Earning Available to Equity Shareholders = Net Profit - Dividend of Preference Shareholders \end{array}$

12.
$\begin{array}{l} Return on Investment = \frac{Profit Before Interest & Tax}{Capital Employed} \times 100 \\ = \frac{1, 43, 200}{3, 06, 700} = 46.69 % \\ Profit Before Interest & Tax = NetProfit + Tax Expenses + Interest on Debentures \\ = 98, 000 + 42, 000 + 3, 200 = Rs 1, 43, 200 \end{array}$

13.
$Price-Earning Ratio= \frac{Market Price Per Share}{Earning Per Share} = \frac{37 .28}{7 .456} = 5 times$

Question 145:

1.
$\begin{array}{l} Inventory Turnover Ratio = \frac{Cost of Revenue From Operations}{Average Inventory} \\ = \frac{3, 15, 000}{29,500} = 10 .68 times \\ Average Inventory = \frac{Opening Inventory + Closing Inventory}{2} \\ = \frac{24, 000 + 35, 000}{2} = Rs 29,500 \\ Cost of Revenue From Operations = Opening Inventory + P u r c h a s e s - Closing Inventory \\ = 24, 000 + 3, 26, 000 - 35, 000 = Rs 3,15,000 \end{array}$

2.
$\begin{array}{l} Gross Profit Ratio = \frac{Gross Profit}{Revenue From Operations} \times 100 \\ = \frac{2, 25, 000}{5, 40, 000} \times 100 = 41 .67 % \\ Gross Profit = Revenue From Operations - C o s t o f Revenue From Operations \\ = 5, 40, 000 - 3, 15, 000 = Rs 2,25,000 \end{array}$

3.
$\begin{array}{l} Working Capital Turnover Ratio = \frac{Revenue From Operations}{Working Capital} \times 100 \\ = \frac{5, 40, 000}{2, 350} = 229.79 times \\ Working Capital = Current Assets - Current Liabilities \\ = 1, 01, 900 - 99, 550 = Rs 2, 350 \end{array}$

4.
$\begin{array}{l} Current Ratio = \frac{Current Assets}{Current Liabilities} \\ = \frac{1,01,900}{99,550} = 1 .024 :1 \end{array}$

5.
$\begin{array}{l} Quick Ratio = \frac{Quick Assets}{Current Liabilities} \\ = \frac{1,01,900 - 35,000}{99, 550} = 0 .67 :1 \end{array}$

6.
$\begin{array}{l} Net Profit Ratio= \frac{Net Profit}{Revenue From Operations} \times 100 \\ = \frac{98, 000}{5, 40, 000} \times 100 = 18 .15 % \end{array}$

7.
$\begin{array}{l} Debt to Equity Ratio = \frac{Debt}{Equity} \\ = \frac{40, 000}{2, 66, 700} = 0 .15 : 1 \\ Equity = Share Capital + Reserve & Surplus \\ =1,85,000+81,700 = Rs 2,66,700 \end{array}$

8.
$\begin{array}{l} Trade Receivables Turnover Ratio = \frac{Net Credit revenue From Operations}{Average Trade Receivables} \\ = \frac{3, 24, 000}{50, 000} = 6 .48 times \\ Net Credit revenue From Operations = 5, 40, 000 \times \frac{60}{100} =Rs 3,24,000 \\ Average Inventory = \frac{Opening Inventory + Closing Inventory}{2} \\ Average Trade Receivables = \frac{54, 000 + 46, 000}{2} = Rs 50,000 \end{array}$

9.
$\begin{array}{l} Proprietary Ratio = \frac{Shareholder' s Funds}{Total Assets} \times 100 \\ = \frac{2, 66, 700}{4, 06, 250} = 0.66 : 1 \\ Shareholder' s Funds = Share Capital + Reserves and Surplus \\ = 1, 85, 000 + 81, 700 = Rs 2, 66, 700 \end{array}$

10.
$\begin{array}{l} Debt to Total Assets Ratio = \frac{Debt}{Total Assets} \\ = \frac{40, 000}{4, 06, 250} = 0 .098 : 1 \end{array}$

11.
$\begin{array}{l} Earning Per Share = \frac{Earning Available to Equity Shareholders}{Number of Equity Shares} \\ = \frac{98, 000 - 4, 800}{12, 500} = Rs 7.456 per share \\ Earning Available to Equity Shareholders = Net Profit - Dividend of Preference Shareholders \end{array}$

12.
$\begin{array}{l} Return on Investment = \frac{Profit Before Interest & Tax}{Capital Employed} \times 100 \\ = \frac{1, 43, 200}{3, 06, 700} = 46.69 % \\ Profit Before Interest & Tax = NetProfit + Tax Expenses + Interest on Debentures \\ = 98, 000 + 42, 000 + 3, 200 = Rs 1, 43, 200 \end{array}$

13.
$Price-Earning Ratio= \frac{Market Price Per Share}{Earning Per Share} = \frac{37 .28}{7 .456} = 5 times$

Answer:

$\begin{array}{l} Operating Ratio = \frac{Cost of Revenue from Operations + Operating Expenses}{Revenue from Operations} \times 100 \\ = \frac{13, 20, 000 + 2, 20, 000}{22, 00, 000} \times 100 = 70 % \\ Cost of Revenue from operations = Revenue from Operations - Gross Profit \\ = 10, 00,000 + 12,00,000 - 8,80,000 = Rs 13,20,000 \\ Gross Profit = 22,00,000 \times 40 % = R s 8,80,000 \end{array}$

$\begin{array}{l} Inventory Turnover Ratio = \frac{Cost of Revenue From Operations}{Average Inventory} \\ = \frac{13, 20, 000}{1, 60, 000} = 8 .25 times \\ Average Inventory = \frac{1,50,000 + 1,70,000}{2} = Rs 1,60,000 \end{array}$

Question 146:

$\begin{array}{l} Operating Ratio = \frac{Cost of Revenue from Operations + Operating Expenses}{Revenue from Operations} \times 100 \\ = \frac{13, 20, 000 + 2, 20, 000}{22, 00, 000} \times 100 = 70 % \\ Cost of Revenue from operations = Revenue from Operations - Gross Profit \\ = 10, 00,000 + 12,00,000 - 8,80,000 = Rs 13,20,000 \\ Gross Profit = 22,00,000 \times 40 % = R s 8,80,000 \end{array}$

$\begin{array}{l} Inventory Turnover Ratio = \frac{Cost of Revenue From Operations}{Average Inventory} \\ = \frac{13, 20, 000}{1, 60, 000} = 8 .25 times \\ Average Inventory = \frac{1,50,000 + 1,70,000}{2} = Rs 1,60,000 \end{array}$

Answer:

A.
$\begin{array}{l} Trade Receivables Turnover Ratio = \frac{Net Credit revenue From Operations}{Average Trade Receivables} \\ = \frac{6, 00, 000}{1,60,000} = 3 .75 times \\ Average Trade Receivables = \frac{1, 20, 000 + 2, 00, 000}{2} = Rs 1,60,000 \\ Revenue From Operations = Cash revenue From Operations + Credit revenue From Operations \\ 8,40,000 =0.4 Credit revenue From Operations + Credit revenue From Operations \\ Credit revenue From Operations = 8, 40, 000 \times \frac{1}{1 .4} = Rs 6,00,000 \end{array}$

B.
$\begin{array}{l} Interest Coverage Ratio = \frac{Profit Before Interest & Tax}{Interest} \\ = \frac{7, 82, 000}{72, 000} = 10 .86 times \\ Profit Before Interest & Tax = 4, 97, 000 + 2, 13, 000 (4, 97, 000 \times \frac{30}{70}) + 72, 000 = Rs 7,82,000 \end{array}$

Question 147:

A.
$\begin{array}{l} Trade Receivables Turnover Ratio = \frac{Net Credit revenue From Operations}{Average Trade Receivables} \\ = \frac{6, 00, 000}{1,60,000} = 3 .75 times \\ Average Trade Receivables = \frac{1, 20, 000 + 2, 00, 000}{2} = Rs 1,60,000 \\ Revenue From Operations = Cash revenue From Operations + Credit revenue From Operations \\ 8,40,000 =0.4 Credit revenue From Operations + Credit revenue From Operations \\ Credit revenue From Operations = 8, 40, 000 \times \frac{1}{1 .4} = Rs 6,00,000 \end{array}$

B.
$\begin{array}{l} Interest Coverage Ratio = \frac{Profit Before Interest & Tax}{Interest} \\ = \frac{7, 82, 000}{72, 000} = 10 .86 times \\ Profit Before Interest & Tax = 4, 97, 000 + 2, 13, 000 (4, 97, 000 \times \frac{30}{70}) + 72, 000 = Rs 7,82,000 \end{array}$

Answer:

$\begin{array}{l} Current Ratio = \frac{Current Assets}{Current Liabilities} \\ 2 .5 = \frac{CA}{CL} \\ 2 .5 CL = CA \\ Working Capital = CA - CL \\ 1, 20, 000 = 2 .5 CL - CL \\ CL = Rs 80,000 \\ CA = 80,000 \times 2.5 = Rs 2,00,000 \\ Quick Ratio = \frac{Current Assets - Closing Stock}{Current Liabilities} \\ 1 .5 = \frac{2, 00, 000 - Closing Stock}{80, 000} \\ Closing Stock = Rs 80,000 \\ Quick Assets = Current Assets - Closing Stock = 2, 00, 000 - 80, 000 = Rs 1,20,000 \\ Inventory Turnover Ratio = \frac{Cost of Revenue from Operations}{Average Stock} \\ 3 = \frac{3, 00, 000}{Average Stoc k} \\ Average Stock = Rs 1,00,00 \\ 1, 00, 000 = \frac{Opening stock + 80,000}{2} \\ Opening stock = Rs 1,20,000 \end{array}$

Question 148:

$\begin{array}{l} Current Ratio = \frac{Current Assets}{Current Liabilities} \\ 2 .5 = \frac{CA}{CL} \\ 2 .5 CL = CA \\ Working Capital = CA - CL \\ 1, 20, 000 = 2 .5 CL - CL \\ CL = Rs 80,000 \\ CA = 80,000 \times 2.5 = Rs 2,00,000 \\ Quick Ratio = \frac{Current Assets - Closing Stock}{Current Liabilities} \\ 1 .5 = \frac{2, 00, 000 - Closing Stock}{80, 000} \\ Closing Stock = Rs 80,000 \\ Quick Assets = Current Assets - Closing Stock = 2, 00, 000 - 80, 000 = Rs 1,20,000 \\ Inventory Turnover Ratio = \frac{Cost of Revenue from Operations}{Average Stock} \\ 3 = \frac{3, 00, 000}{Average Stoc k} \\ Average Stock = Rs 1,00,00 \\ 1, 00, 000 = \frac{Opening stock + 80,000}{2} \\ Opening stock = Rs 1,20,000 \end{array}$

Answer:

1.
$\begin{array}{l} Current Ratio = \frac{Current Assets}{Current Liabilities} = \frac{16, 40, 000}{8, 40, 000} = 2 : 1 \\ Current Assets = Inventories + Current Investments + Trade Receivables + Cash and Bank Balances \\ Prepaid Expenses + Short term Loans and Advances \\ = 7, 90, 000 + 20, 000 + 8, 00, 000 + 10, 000 + 10, 000 + 10, 000 = Rs 16, 40, 000 \\ Current Liabilities = Trade payables + Short term Bank Loan + Other Current Liabilities \\ + Provision for Taxation + Provision for Doubtful Debts \\ = 2, 00, 000 + 80, 000 + 2, 80, 000 + 2, 40, 000 + 40, 000 = Rs 8, 40, 000 \end{array}$

2.
$\begin{array}{l} Quick Ratio = \frac{Quick Assets}{Current Liabilities} \\ = \frac{16, 40, 000 - 7, 90, 000 - 10, 000}{8, 40, 000} = 1 : 1 \\ Quick Assets = Current Assets - (Inventories + Prepaid Expenses) \\ = 16, 40, 000 - 7, 90, 000 - 10, 000 = Rs 8, 40, 000 \end{array}$

3.
$\begin{array}{l} Debt to Equity Ratio = \frac{Debt}{Equity} \\ = \frac{16, 00, 000}{8, 00, 000} = 2 : 1 \\ Equity = Share Capital + Reserve & Surplus \\ =2,00,000+2,00,000+1,60,000+2,40,000 = Rs 8,00,000 \\ Debt = 12 % Debentures + Long term Provisions \\ = 10, 00, 000 + 6, 00, 000 = Rs 16, 00, 000 \end{array}$

4.
$\begin{array}{l} Debt to Total Assets Ratio = \frac{Debt}{Total Assets} \\ = \frac{16, 00, 000}{16, 40, 000 + 10, 00, 000 + 4, 00, 000} = 0 .5 : 1 \end{array}$

5.
$\begin{array}{l} Proprietary Ratio = \frac{Shareholder's Funds}{Total Assets} \times 100 \\ = \frac{8, 00, 000}{32, 40, 000} = . 25 : 1 \\ Total Assets = Fixed Assets + Non-Current Investments + Long term Loans and Advances + Inventories \\ + Current Investments+ Trade Receivables + Cash and Bank Balances \\ + Prepaid Expenses + Short term Loans and Advances = Rs 32,40,000 \end{array}$

6.
$\begin{array}{l} Interest Coverage Ratio = \frac{Profit before Interest &Tax}{Total Interest} \\ = \frac{6, 00, 000}{1, 20, 000} = 5 times \\ Profit before Interest &Tax = Profit after Interest &Tax + Tax + Interest on Debentures \\ = 2, 40, 000 + 2, 40, 000 + 1, 20, 000 = Rs 6,00,000 \end{array}$

7.
$\begin{array}{l} Inventory Turnover Ratio = \frac{Cost of Revenue From Operations}{Average Inventory} \\ = \frac{12, 00, 000}{5, 00, 000} = 2 .4 times \\ Average Inventory = \frac{Opening Inventory + Closing Inventory}{2} \\ = \frac{2, 10, 000 + 7, 90, 000}{2} = Rs 5,00,000 \\ Cost of Revenue From Operations = Opening Inventory + Purchases - Closing Inventory \\ = 2, 10, 000 + 17, 80, 000 - 7, 90, 000 = Rs 12,00,000 \end{array}$

8.
$\begin{array}{l} Trade Receivables Turnover Ratio = \frac{Net Credit revenue From Operations}{Average Trade Receivables} \\ = \frac{16, 00, 000}{8, 00, 000} = 2 times \\ Net Credit Revenue From Operations = Total Revenue From Operations - Cash Revenue From Operations \\ = 20, 00, 000 - 4, 00, 000 =Rs 16,00,000 \end{array}$

9.
$\begin{array}{l} Trade Payables Turnover Ratio = \frac{Net Credit Purchases}{Average Trade Payables} \\ = \frac{17, 80, 000}{2, 00, 000} = 8 .9 times \end{array}$

10.
$\begin{array}{l} Working Capital Turnover Ratio= \frac{Revenue From Operations}{Working Capital} \times 100 \\ = \frac{20, 00, 000}{8, 00, 000} = 2 .5 times \\ Working Capital = 16, 40, 000 - 8, 40, 000 = Rs 8,00,000 \end{array}$

11.
$\begin{array}{l} Gross Profit Ratio= \frac{Gross Profit}{Revenue From Operations} \times 100 \\ = \frac{8, 00, 000}{20, 00, 000} \times 100 = 40 % \\ Gross Profit = Revenue From Operations - Cost of Revenue From Operations \\ = 20, 00, 000 - 12, 00, 000 = Rs 8,00,000 \end{array}$

12.
$\begin{array}{l} Net Profit Ratio= \frac{Net Profit}{Revenue From Operations} \times 100 \\ = \frac{2, 40, 000}{20, 00, 000} \times 100 = 12 % \end{array}$

13.
$\begin{array}{l} Operating Ratio= \frac{Cost of Revenue From Operations+Operating Expenses}{Revenue From Operations} \times 100 \\ = \frac{12, 00, 000 + 2, 00, 000}{20, 00, 000} \times 100 = 70 % \end{array}$

14.
$\begin{array}{l} Operating Profit Ratio = \frac{Operating Profit}{Revenue From Operations} \times 100 \\ = \frac{6, 00, 000}{20, 00, 000} \times 100 = 30 % \\ Operating Profit = Gross Profit - Operating Expenses \\ = 8, 00, 000 - 2, 00, 000 = Rs 6, 00, 000 \end{array}$

Question 1:

1.
$\begin{array}{l} Current Ratio = \frac{Current Assets}{Current Liabilities} = \frac{16, 40, 000}{8, 40, 000} = 2 : 1 \\ Current Assets = Inventories + Current Investments + Trade Receivables + Cash and Bank Balances \\ Prepaid Expenses + Short term Loans and Advances \\ = 7, 90, 000 + 20, 000 + 8, 00, 000 + 10, 000 + 10, 000 + 10, 000 = Rs 16, 40, 000 \\ Current Liabilities = Trade payables + Short term Bank Loan + Other Current Liabilities \\ + Provision for Taxation + Provision for Doubtful Debts \\ = 2, 00, 000 + 80, 000 + 2, 80, 000 + 2, 40, 000 + 40, 000 = Rs 8, 40, 000 \end{array}$

2.
$\begin{array}{l} Quick Ratio = \frac{Quick Assets}{Current Liabilities} \\ = \frac{16, 40, 000 - 7, 90, 000 - 10, 000}{8, 40, 000} = 1 : 1 \\ Quick Assets = Current Assets - (Inventories + Prepaid Expenses) \\ = 16, 40, 000 - 7, 90, 000 - 10, 000 = Rs 8, 40, 000 \end{array}$

3.
$\begin{array}{l} Debt to Equity Ratio = \frac{Debt}{Equity} \\ = \frac{16, 00, 000}{8, 00, 000} = 2 : 1 \\ Equity = Share Capital + Reserve & Surplus \\ =2,00,000+2,00,000+1,60,000+2,40,000 = Rs 8,00,000 \\ Debt = 12 % Debentures + Long term Provisions \\ = 10, 00, 000 + 6, 00, 000 = Rs 16, 00, 000 \end{array}$

4.
$\begin{array}{l} Debt to Total Assets Ratio = \frac{Debt}{Total Assets} \\ = \frac{16, 00, 000}{16, 40, 000 + 10, 00, 000 + 4, 00, 000} = 0 .5 : 1 \end{array}$

5.
$\begin{array}{l} Proprietary Ratio = \frac{Shareholder's Funds}{Total Assets} \times 100 \\ = \frac{8, 00, 000}{32, 40, 000} = . 25 : 1 \\ Total Assets = Fixed Assets + Non-Current Investments + Long term Loans and Advances + Inventories \\ + Current Investments+ Trade Receivables + Cash and Bank Balances \\ + Prepaid Expenses + Short term Loans and Advances = Rs 32,40,000 \end{array}$

6.
$\begin{array}{l} Interest Coverage Ratio = \frac{Profit before Interest &Tax}{Total Interest} \\ = \frac{6, 00, 000}{1, 20, 000} = 5 times \\ Profit before Interest &Tax = Profit after Interest &Tax + Tax + Interest on Debentures \\ = 2, 40, 000 + 2, 40, 000 + 1, 20, 000 = Rs 6,00,000 \end{array}$

7.
$\begin{array}{l} Inventory Turnover Ratio = \frac{Cost of Revenue From Operations}{Average Inventory} \\ = \frac{12, 00, 000}{5, 00, 000} = 2 .4 times \\ Average Inventory = \frac{Opening Inventory + Closing Inventory}{2} \\ = \frac{2, 10, 000 + 7, 90, 000}{2} = Rs 5,00,000 \\ Cost of Revenue From Operations = Opening Inventory + Purchases - Closing Inventory \\ = 2, 10, 000 + 17, 80, 000 - 7, 90, 000 = Rs 12,00,000 \end{array}$

8.
$\begin{array}{l} Trade Receivables Turnover Ratio = \frac{Net Credit revenue From Operations}{Average Trade Receivables} \\ = \frac{16, 00, 000}{8, 00, 000} = 2 times \\ Net Credit Revenue From Operations = Total Revenue From Operations - Cash Revenue From Operations \\ = 20, 00, 000 - 4, 00, 000 =Rs 16,00,000 \end{array}$

9.
$\begin{array}{l} Trade Payables Turnover Ratio = \frac{Net Credit Purchases}{Average Trade Payables} \\ = \frac{17, 80, 000}{2, 00, 000} = 8 .9 times \end{array}$

10.
$\begin{array}{l} Working Capital Turnover Ratio= \frac{Revenue From Operations}{Working Capital} \times 100 \\ = \frac{20, 00, 000}{8, 00, 000} = 2 .5 times \\ Working Capital = 16, 40, 000 - 8, 40, 000 = Rs 8,00,000 \end{array}$

11.
$\begin{array}{l} Gross Profit Ratio= \frac{Gross Profit}{Revenue From Operations} \times 100 \\ = \frac{8, 00, 000}{20, 00, 000} \times 100 = 40 % \\ Gross Profit = Revenue From Operations - Cost of Revenue From Operations \\ = 20, 00, 000 - 12, 00, 000 = Rs 8,00,000 \end{array}$

12.
$\begin{array}{l} Net Profit Ratio= \frac{Net Profit}{Revenue From Operations} \times 100 \\ = \frac{2, 40, 000}{20, 00, 000} \times 100 = 12 % \end{array}$

13.
$\begin{array}{l} Operating Ratio= \frac{Cost of Revenue From Operations+Operating Expenses}{Revenue From Operations} \times 100 \\ = \frac{12, 00, 000 + 2, 00, 000}{20, 00, 000} \times 100 = 70 % \end{array}$

14.
$\begin{array}{l} Operating Profit Ratio = \frac{Operating Profit}{Revenue From Operations} \times 100 \\ = \frac{6, 00, 000}{20, 00, 000} \times 100 = 30 % \\ Operating Profit = Gross Profit - Operating Expenses \\ = 8, 00, 000 - 2, 00, 000 = Rs 6, 00, 000 \end{array}$

Answer:

â€‹ $Current Ratio = \frac{Current Assets}{Current Liabilities}$

Current Assets	=	Debtors + Prepaid Expenses + Cash + Marketable Securities + Inventory
	=	2, 00,000 + 20,000 + 60,000 + 40,000 + 80,000
	=	Rs 4, 00,000

â€‹Current Liabilities	=	Bills Payables + Creditors + Expenses Payables
	=	40,000 + 80,000 + 80,000
	=	Rs 2, 00,000

Current Ratio = \frac{Current Assets}{Current Liabilities} = 2 : 1

Question 2:

â€‹ $Current Ratio = \frac{Current Assets}{Current Liabilities}$

Current Assets	=	Debtors + Prepaid Expenses + Cash + Marketable Securities + Inventory
	=	2, 00,000 + 20,000 + 60,000 + 40,000 + 80,000
	=	Rs 4, 00,000

â€‹Current Liabilities	=	Bills Payables + Creditors + Expenses Payables
	=	40,000 + 80,000 + 80,000
	=	Rs 2, 00,000

Current Ratio = \frac{Current Assets}{Current Liabilities} = 2 : 1

Answer:

Current Liabilities	=	Creditors + Other Current Liabilities
	=	80,000 + 4, 00,000
	=	Rs 4, 80,000

Working Capital	=	Current Assets – Current Liabilities
7, 00,000	=	Current Assets – 4, 80,000
Current Assets	=	Rs 11, 80,000

\begin{array}{ccl} Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ = & \frac{11, 80, 000}{4, 80, 000} \\ = & 2.458 : 1 \end{array}

Question 3:

Current Liabilities	=	Creditors + Other Current Liabilities
	=	80,000 + 4, 00,000
	=	Rs 4, 80,000

Working Capital	=	Current Assets – Current Liabilities
7, 00,000	=	Current Assets – 4, 80,000
Current Assets	=	Rs 11, 80,000

\begin{array}{ccl} Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ = & \frac{11, 80, 000}{4, 80, 000} \\ = & 2.458 : 1 \end{array}

Answer:

Current Liabilities	=	Total Debt – Long Term Debts
	=	6, 50,000 – 5, 00, 000
	=	Rs. 1, 50,000

Working Capital	=	Current Assets – Current Liabilities
3, 00,000	=	Current Assets – 1, 50,000
Current Assets	=	Rs. 4, 50,000.

\begin{array}{ccl} Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ = & \frac{4, 50, 000}{1, 50, 000} \\ = & 3 : 1 \end{array}

Question 4:

Current Liabilities	=	Total Debt – Long Term Debts
	=	6, 50,000 – 5, 00, 000
	=	Rs. 1, 50,000

Working Capital	=	Current Assets – Current Liabilities
3, 00,000	=	Current Assets – 1, 50,000
Current Assets	=	Rs. 4, 50,000.

\begin{array}{ccl} Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ = & \frac{4, 50, 000}{1, 50, 000} \\ = & 3 : 1 \end{array}

Answer:

Working Capital	=	Current Asset* – Current Liabilities
5, 00,000	=	6, 00,000 – Current Liabilities
Current Liabilities	=	Rs. 1, 00,000

(Current Asset*	=	Current Assets- Loose tools – Stores & Spares
	=	8, 00,000 – 15, 00,000 -50,000
	=	6, 00,000)

\begin{array}{ccl} Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ = & \frac{6, 00, 000}{1, 00, 000} \\ = & 6 : 1 \end{array}

Question 5:

Working Capital	=	Current Asset* – Current Liabilities
5, 00,000	=	6, 00,000 – Current Liabilities
Current Liabilities	=	Rs. 1, 00,000

(Current Asset*	=	Current Assets- Loose tools – Stores & Spares
	=	8, 00,000 – 15, 00,000 -50,000
	=	6, 00,000)

\begin{array}{ccl} Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ = & \frac{6, 00, 000}{1, 00, 000} \\ = & 6 : 1 \end{array}

Answer:

Case: 1

$\begin{array}{l} Working Capital = Current Assets - Current Liabilities \\ 7,20,000 = Current Assets - 2,40,000 \\ Current Assets = Rs 9,60,000 \\ Current Ratio = \frac{Current Assets}{Current Liabilities} \\ = \frac{9,60,000}{2,40,000} = 4 :1 \end{array}$

Case: 2

$\begin{array}{l} Working Capital = Current Assets - Current Liabilities \\ 6,00,000 = 8,00,000 - Current Liabilities \\ Current Liabilities = Rs 2,00,000 \\ Current Ratio = \frac{Current Assets}{Current Liabilities} \\ = \frac{8,00,000}{2,00,000} = 4 :1 \end{array}$

Case: 3

$\begin{array}{l} Working Capital = Current Assets - Current Liabilities \\ 4,00,000 = Current Assets - 2,00,000 \\ Current Assets = Rs 6,00,000 \\ Current Ratio = \frac{Current Assets}{Current Liabilities} \\ = \frac{6,00,000}{2,00,000} = 3 :1 \end{array}$

Question 6:

Case: 1

$\begin{array}{l} Working Capital = Current Assets - Current Liabilities \\ 7,20,000 = Current Assets - 2,40,000 \\ Current Assets = Rs 9,60,000 \\ Current Ratio = \frac{Current Assets}{Current Liabilities} \\ = \frac{9,60,000}{2,40,000} = 4 :1 \end{array}$

Case: 2

$\begin{array}{l} Working Capital = Current Assets - Current Liabilities \\ 6,00,000 = 8,00,000 - Current Liabilities \\ Current Liabilities = Rs 2,00,000 \\ Current Ratio = \frac{Current Assets}{Current Liabilities} \\ = \frac{8,00,000}{2,00,000} = 4 :1 \end{array}$

Case: 3

$\begin{array}{l} Working Capital = Current Assets - Current Liabilities \\ 4,00,000 = Current Assets - 2,00,000 \\ Current Assets = Rs 6,00,000 \\ Current Ratio = \frac{Current Assets}{Current Liabilities} \\ = \frac{6,00,000}{2,00,000} = 3 :1 \end{array}$

Answer:

$\begin{array}{ccl} Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ = & \frac{4, 50, 000 + 50, 000}{2, 00, 000 + 50, 000} \\ = & 2 : 1 \end{array} (After Purchase)$

Question 7:

$\begin{array}{ccl} Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ = & \frac{4, 50, 000 + 50, 000}{2, 00, 000 + 50, 000} \\ = & 2 : 1 \end{array} (After Purchase)$

Answer:

Let’s take Current Asset = Rs. 2, 50,000 and Current Liability = Rs. 1, 00,000

a. Payment to Creditors say Rs 50,000, So

Current Ratio = \frac{2, 50, 000 - 50, 000}{1, 00, 000 - 50, 000} = 4 : 1 (Improve)

b. Sale of Machinery Say Rs. 50,000, So

Current Ratio = \frac{2, 50, 000 + 50, 000}{1, 00, 000} = 3 : 1 (Improve)

c. Purchase of Goods for Cash Say Rs. 50,000, So

Current Ratio = \frac{2, 50, 000 + 50, 000 - 50, 000}{1, 00, 000} = 2 : 5 : 1 (No Change)

d. Issue of Equity Shares Say Rs. 50,000

= \frac{2, 50, 000 + 50, 000}{1, 00, 000} = 3 : 1 (Improve)

Question 8:

Let’s take Current Asset = Rs. 2, 50,000 and Current Liability = Rs. 1, 00,000

a. Payment to Creditors say Rs 50,000, So

Current Ratio = \frac{2, 50, 000 - 50, 000}{1, 00, 000 - 50, 000} = 4 : 1 (Improve)

b. Sale of Machinery Say Rs. 50,000, So

Current Ratio = \frac{2, 50, 000 + 50, 000}{1, 00, 000} = 3 : 1 (Improve)

c. Purchase of Goods for Cash Say Rs. 50,000, So

Current Ratio = \frac{2, 50, 000 + 50, 000 - 50, 000}{1, 00, 000} = 2 : 5 : 1 (No Change)

d. Issue of Equity Shares Say Rs. 50,000

= \frac{2, 50, 000 + 50, 000}{1, 00, 000} = 3 : 1 (Improve)

Answer:

$\begin{array}{ccl} Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ = & \frac{48, 000}{24, 000} \\ = & 2 : 1 \end{array}$

Current Assets	=	Inventories + Trade Receivables + Cash
	=	18,600 + 9,600 +19,800
	=	Rs 48,000

Current Liabilities	=	Bank Overdraft+ Trade Payables
	=	6,000 + 18,000
	=	Rs 24,000

Note: The answer provided in the book is 1 : 1, however, as per our solution the current ratio is 2 : 1.

Question 9:

$\begin{array}{ccl} Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ = & \frac{48, 000}{24, 000} \\ = & 2 : 1 \end{array}$

Current Assets	=	Inventories + Trade Receivables + Cash
	=	18,600 + 9,600 +19,800
	=	Rs 48,000

Current Liabilities	=	Bank Overdraft+ Trade Payables
	=	6,000 + 18,000
	=	Rs 24,000

Note: The answer provided in the book is 1 : 1, however, as per our solution the current ratio is 2 : 1.

Answer:

$\begin{array}{ccl} Liquidity Ratio & = & \frac{Current Assets - Stock - Prepaid Expenses}{Current Liability} \\ = & \frac{2, 40, 000 - 75, 000 - 15, 000}{1, 50, 000} \\ = & \frac{1, 50, 000}{1, 50, 000} = 1 : 1 \end{array}$

Question 10:

$\begin{array}{ccl} Liquidity Ratio & = & \frac{Current Assets - Stock - Prepaid Expenses}{Current Liability} \\ = & \frac{2, 40, 000 - 75, 000 - 15, 000}{1, 50, 000} \\ = & \frac{1, 50, 000}{1, 50, 000} = 1 : 1 \end{array}$

Answer:

Current Assets	=	Liquid Assets + Stock + Prepaid Expenses
	=	1, 87,500 + 50,000 + 12,500
	=	Rs 2, 50,000

Working Capital	=	Current Assets – Current Liabilities
1, 50,000	=	2, 50,000 –Current Liabilities
Current Liabilities	=	Rs 1, 00,000

\begin{array}{ccl} Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ = & \frac{2, 50, 000}{1, 00, 000} \\ = & 2.5 : 1 \end{array}

Question 11:

Current Assets	=	Liquid Assets + Stock + Prepaid Expenses
	=	1, 87,500 + 50,000 + 12,500
	=	Rs 2, 50,000

Working Capital	=	Current Assets – Current Liabilities
1, 50,000	=	2, 50,000 –Current Liabilities
Current Liabilities	=	Rs 1, 00,000

\begin{array}{ccl} Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ = & \frac{2, 50, 000}{1, 00, 000} \\ = & 2.5 : 1 \end{array}

Answer:

Working Capital	=	Current Assets – Current Liabilities
5, 00,000	=	10, 00,000 –Current Liabilities
Current Liabilities	=	Rs 5, 00,000

Liquidity Ratio = \frac{Current Ratio - Inventory (Stock)}{Current Liability - Bank Overdraft} = \frac{10, 00, 000 - 2, 00, 000}{5, 00, 000} = \frac{8, 00, 000}{5, 00, 000} = 1.6 : 1

Question 12:

Working Capital	=	Current Assets – Current Liabilities
5, 00,000	=	10, 00,000 –Current Liabilities
Current Liabilities	=	Rs 5, 00,000

Liquidity Ratio = \frac{Current Ratio - Inventory (Stock)}{Current Liability - Bank Overdraft} = \frac{10, 00, 000 - 2, 00, 000}{5, 00, 000} = \frac{8, 00, 000}{5, 00, 000} = 1.6 : 1

Answer:

$\begin{array}{l} Working Capital = Current Assets - Current Liabilities \\ 3,00,000 = 5,00,000 - Current Liabilities \\ Current Liabilities = Rs 2,00,000 \\ Quick Ratio = \frac{Quick Assets}{Current Liabilities} \\ = \frac{5,00,000 - 75,000 - 25,000}{2,00,000} = 2 :1 \end{array}$

Question 13:

$\begin{array}{l} Working Capital = Current Assets - Current Liabilities \\ 3,00,000 = 5,00,000 - Current Liabilities \\ Current Liabilities = Rs 2,00,000 \\ Quick Ratio = \frac{Quick Assets}{Current Liabilities} \\ = \frac{5,00,000 - 75,000 - 25,000}{2,00,000} = 2 :1 \end{array}$

Answer:

$\begin{array}{l} Quick Ratio = \frac{Quick Assets}{Current Liabilities} \\ = \frac{2,20,000 - 47,500 - 2,500}{1,70,000} = 1 :1 \end{array}$

Question 14:

$\begin{array}{l} Quick Ratio = \frac{Quick Assets}{Current Liabilities} \\ = \frac{2,20,000 - 47,500 - 2,500}{1,70,000} = 1 :1 \end{array}$

Answer:

Question 15:

Answer:

Question 16:

Answer:

Question 17:

Answer:

$\begin{array}{rcl} Liquidity Ratio & = & \frac{Current Assets - Stock}{Current Liability} \\ 2 & = & \frac{Current Assets - 50,000}{1,25,000} \\ 2, 50, 000 & = & Current Assets - 50, 000 \\ Current Assets & = & 3, 00, 000 \end{array}$

$\begin{array}{ccl} Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ = & \frac{3, 00, 000}{1, 25, 000} \\ = & 2.4 : 1 \end{array}$

Question 18:

$\begin{array}{rcl} Liquidity Ratio & = & \frac{Current Assets - Stock}{Current Liability} \\ 2 & = & \frac{Current Assets - 50,000}{1,25,000} \\ 2, 50, 000 & = & Current Assets - 50, 000 \\ Current Assets & = & 3, 00, 000 \end{array}$

$\begin{array}{ccl} Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ = & \frac{3, 00, 000}{1, 25, 000} \\ = & 2.4 : 1 \end{array}$

Answer:

Question 19:

Answer:

Working Capital	=	Current Assets – Current Liabilities
84,000	=	1, 00,000 – Current Liabilities
Current Liabilities	=	Rs 16,000

Question 20:

Working Capital	=	Current Assets – Current Liabilities
84,000	=	1, 00,000 – Current Liabilities
Current Liabilities	=	Rs 16,000

Answer:

Working Capital	=	Current Assets – Current Liabilities
2, 40,000	=	2.5Current Liabilities - Current Liabilities
Current Liabilities	=	Rs 1, 60,000
Current Assets	=	2.5 1, 60,000 = Rs 4, 00,000

Question 21:

Working Capital	=	Current Assets – Current Liabilities
2, 40,000	=	2.5Current Liabilities - Current Liabilities
Current Liabilities	=	Rs 1, 60,000
Current Assets	=	2.5 1, 60,000 = Rs 4, 00,000

Answer:

Current Assets	=	Inventories + Trade Receivables + Cash + Advance Tax
	=	1, 00,000 + 1, 00,000 + 60,000 +8,000
	=	Rs 2, 68,000

Current Liabilities	=	Trade Payables + Bank Overdraft
	=	2, 00,000 + 8,000
	=	Rs 2, 08,000

Current Ratio = \frac{Current Assets}{Current Liabilities} = \frac{2, 68, 000}{2, 08, 000} = 1.29 : 1

Quick Ratio = \frac{Current Assets - Stock - Prepaid Expenses}{Current Liabilities} = \frac{2, 68, 000 - 1, 00, 000}{2, 08, 000} = \frac{1, 68, 000}{2, 08, 000} = 0.8 : 1

Question 22:

Current Assets	=	Inventories + Trade Receivables + Cash + Advance Tax
	=	1, 00,000 + 1, 00,000 + 60,000 +8,000
	=	Rs 2, 68,000

Current Liabilities	=	Trade Payables + Bank Overdraft
	=	2, 00,000 + 8,000
	=	Rs 2, 08,000

Current Ratio = \frac{Current Assets}{Current Liabilities} = \frac{2, 68, 000}{2, 08, 000} = 1.29 : 1

Quick Ratio = \frac{Current Assets - Stock - Prepaid Expenses}{Current Liabilities} = \frac{2, 68, 000 - 1, 00, 000}{2, 08, 000} = \frac{1, 68, 000}{2, 08, 000} = 0.8 : 1

Answer:

Current Assets	=	Inventories + Prepaid Expenses + Other Current Assets
	=	30,000 + 2000 + 50,000
	=	Rs 82,000

Liquidity Ratio = \frac{Current Assets - Stock - Prepaid Expenses}{Current Liabilities} = \frac{82, 000 - 30, 000 - 2, 000}{40, 000} = \frac{50, 000}{40, 000} = 1.25 : 1

Question 23:

Current Assets	=	Inventories + Prepaid Expenses + Other Current Assets
	=	30,000 + 2000 + 50,000
	=	Rs 82,000

Liquidity Ratio = \frac{Current Assets - Stock - Prepaid Expenses}{Current Liabilities} = \frac{82, 000 - 30, 000 - 2, 000}{40, 000} = \frac{50, 000}{40, 000} = 1.25 : 1

Answer:

$\begin{array}{ccl} (i) Current Ratio & = & \frac{Current Assets}{Current Liabilities} \\ or, Current Ratio & = & \frac{48, 000}{48, 000} \\ or, Current Ratio & = & 1 : 1 \end{array}$

Current Assets	=	Inventories + Trade Receivables + Cash + Prepaid Expenses
	=	24,000 + 18,000 +4,560 + 1,440
	=	Rs 48,000

Current Liabilities	=	Bank Overdraft+ Trade Payables + Short term provision
	=	10,000 + 36,800 + 1,200
	=	Rs 48,000

\begin{array}{ccl} (ii) Liquid Ratio & = & \frac{Current Assets - Stock - Prepaid Expenses}{Current Liability} \\ or, Liquid Ratio & = & \frac{48, 000 - 24, 000 - 1, 440}{48, 000} \\ or, Liquid Ratio & = & \frac{22, 560}{48, 000} = 0.47 : 1 \end{array}

Management Accounting Ts Grewal (2017) Solutions for Class 12 Commerce Accountancy Chapter 3 - Ratio Analysis

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