Management Accounting Ts Grewal (2016) Solutions for Class 12 Commerce Accountancy Chapter 3 Ratio Analysis are provided here with simple step-by-step explanations. These solutions for Ratio Analysis are extremely popular among class 12 Commerce students for Accountancy Ratio Analysis Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the Management Accounting Ts Grewal (2016) Book of class 12 Commerce Accountancy Chapter 3 are provided here for you for free. You will also love the ad-free experience on Meritnation’s Management Accounting Ts Grewal (2016) Solutions. All Management Accounting Ts Grewal (2016) Solutions for class 12 Commerce Accountancy are prepared by experts and are 100% accurate.

Page No 4.100:

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
 

Page No 4.100:

Answer:


 

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



Page No 4.101:

Answer:


 

Shareholder’s Fund  =  Share Capital + Reserve and Surplus
   =  6, 00,000 + 1, 30,000
   =  Rs. 7, 30,000

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Inventory Turnover Ratio (2015) = Cost of Revenue from OperationsAverage Stockor, Inventory Turnover Ratio (2015) = 42,00014,000 = 3 Times

Inventory Turnover Ratio (2016) = Cost of Revenue from OperationsAverage Stockor, Inventory Turnover Ratio (2016) = 50,00020,000 = 2.5 Times

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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 

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Page No 4.104:

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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

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Page No 4.85:

Answer:

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

Current Ratio = Current AssetsCurrent Liabilities=2: 1



Page No 4.86:

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

Current Ratio=Current AssetsCurrent Liabilities=11,80,0004,80,000=2.458: 1

Page No 4.86:

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.

Current Ratio=Current AssetsCurrent Liabilities=4,50,0001,50,000=3: 1

Page No 4.86:

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)

Current Ratio=Current AssetsCurrent Liabilities=6,00,0001,00,000=6: 1

Page No 4.86:

Answer:

Current Ratio=Current AssetsCurrent Liabilities=4,50,000+50,0002,00,000+50,000= 2: 1After Purchase

Page No 4.86:

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=2,50,000-50,0001,00,000-50,000=4: 1 Improve
 
b. Sale of Machinery Say Rs. 50,000, So
 
Current Ratio=2,50,000+50,0001,00,000=3: 1 Improve
 
c. Purchase of Goods for Cash Say Rs. 50,000, So
 
Current Ratio=2,50,000+50,000-50,0001,00,000=2: 5: 1 No Change
 
d. Issue of Equity Shares Say Rs. 50,000
 
=2,50,000+50,0001,00,000=3: 1 Improve

Page No 4.86:

Answer:

Current Ratio=Current AssetsCurrent Liabilities=48,00024,000=2: 1
 

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.

Page No 4.86:

Answer:

Liquidity Ratio=Current Assets-Stock-Prepaid ExpensesCurrent Liability=2,40,000-75,000-15,0001,50,000=1,50,0001,50,000=1: 1

Page No 4.86:

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

Current Ratio=Current AssetsCurrent Liabilities=2,50,0001,00,000=2.5: 1

Page No 4.86:

Answer:

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


Liquidity Ratio=Current Ratio-Inventory (Stock)Current Liability-Bank Overdraft                          =10,00,000-2,00,0005,00,000-1,00,000=8,00,0004,00,000                           =2:1

Page No 4.86:

Answer:

Current Liabilities  =  Total Debt – Long Term Borrowings
   =  4, 90,000 – 4, 00, 000
   =  Rs. 90,000
 
Working Capital  =  Current Assets – Current Liabilities
5, 10,000  =  Current Assets – 90,000
Current Assets  =  Rs 6, 00,000
 
Quick Liabilities  =  Current Liabilities – Bank Overdraft
   =  90,000 – 10, 000
   =  Rs. 80,000
 
Quick Assets  =  Current Assets – Investory – Prepaid Expenses
   =  6,00,000 – 75,000 – 25,000
   =  Rs 5, 00,000

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Page No 4.86:

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Liquidity Ratio=Current Assets - Stock Current Liability  2=Current Assets  - 50,0001,25,000   2,50,000=Current Assets - 50,000Current Assets=3,00,000

Current Ratio=Current AssetsCurrent Liabilities=3,00,0001,25,000=2.4: 1

* Current Liabilities remains same as Quick liabilities, if there is no bank overdraft.



Page No 4.87:

Answer:

Page No 4.87:

Answer:

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

Page No 4.87:

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

Page No 4.87:

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



Page No 4.87:

Answer:

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



Page No 4.87:

Answer:

(i) Current Ratio=Current AssetsCurrent Liabilitiesor, Current Ratio=48,00048,000or, Current Ratio=1: 1
 

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  

(ii) Liquid Ratio=Current Assets-Stock-Prepaid ExpensesCurrent Liability-Over draftor, Liquid Ratio=48,000-24,000-1,44048,000-10,000or, Liquid Ratio=22,56038,000=0.59: 1



Page No 4.88:

Answer:

Debt Equity Ratio=DebtEquity
 

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
   =  7,50,00010,00,000
   = 0.75:1

Page No 4.88:

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

Debt Equity Ratio=DebtEquity=1, 60, 00080, 000=2: 1

Page No 4.88:

Answer:

Debt Equity Ratio=DebtEquity
 

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
   =  15,00,00010,00,000
   =  1.5: 1

Page No 4.88:

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 

Page No 4.88:

Answer:

Debt Equity Ratio=DebtEquity
 

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
  =  4,50,0003,00,000
  =  1.5: 1



Page No 4.89:

Answer:

Debt Equity Ratio=DebtEquity
 

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
  = 2,50,0005,00,000
  =  0.5: 1

Page No 4.89:

Answer:


 

Shareholder’s Fund  =  Share Capital + Reserve and Surplus
   =  4, 50,000 + 75,000
   =  Rs. 5, 25,000
   =  5,25,0007,50,000
   =  0.7: 1



Page No 4.90:

Answer:

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

Page No 4.90:

Answer:

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

Page No 4.90:

Answer:


 

Capital Employed  =   Shareholders' Fund + Long-Term Debts - Investment (Non-Trade)
14,50,000  = 10,00,000 (7,50,000 + 2,50,000) + Long-Term Debts - 1, 00,000
Long-Term Debts  =  Rs.  5,50,000
 
Total Assets  =  Fixed Assets + Trade Receivables + Investment + Cash
   =  6, 50,000 + 6, 00,000 + 1, 00,000 + 3, 00,000
   =  Rs. 16, 50,000

Page No 4.90:

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

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Page No 4.91:

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
  =  15,00,00045,00,000
  =  0.33: 1


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

Page No 4.91:

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 






Page No 4.91:

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 

 



Page No 4.92:

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Page No 4.92:

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

Page No 4.92:

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

Page No 4.92:

Answer:

Interest Coverage Ratio = Profit before Interest and TaxInterest on Long-term DebtsInterest Coverage Ratio = 7,20,000*1,00,000 = 7.2 Times*Profit after Interest but before Tax =6,20,000Add: Interest                            =1,00,000 Profit before Interest and Tax       = Rs 7,20,000



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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

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Working Capital Turnover Ratio = Revenue from OperationsWorking CapitalWorking Capital Turnover Ratio = 21,00,0003,50,000 = 6 TimesRevenue from Operations = Sales - Sales ReturnRevenue from Operations = 23,00,000 - 2,00,000 = Rs 21,00,000Working Capital = Current Assets - Current LiabilitiesWorking Capital = 6,00,000 - 2,50,000 = Rs 3,50,000Current Assets = Marketable Securities + Inventory + Sundry Debtors + Bills Receivable + Cash at Bank + Cash in HandCurrent Assets = 1,50,000 + 50,000 + 2,00,000 +50,000 +1,00,000 +50,000 = Rs 6,00,000Current Liabilities = Bills Payable + Sundry Creditors + Provision for TaxCurrent Liabilities = 30,000 +2,00,000 + 20,000 = Rs 2,50,000

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Current Assets  =  Inventory + Trade Receivables + Cash
   =  62,000 + 32,000 + 66,000
   =  Rs 1, 60,000
 
Current Liabilities  =  Bank Overdraft + Trade Payables
   =  20,000 + 60,000
   =  Rs 80,000

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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
 

Page No 4.99:

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

Page No 4.99:

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

Page No 4.99:

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



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