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Question 32 Chapter 4 of +2-B
32. (Shareholders’ Funds with both approaches) From the following Balance Sheet of Rani Limited calculate the Shareholders funds and Debt Equity Ratio by following liabilities Approach and Assets Approach.
Balance Sheet of Rani Ltd.
| As of 31st March 2018 | |
| Particulars | ₹ |
| I. Equity and Liabilities | |
| 1. Shareholders’ Funds | |
| Share capital | 3,00,000 |
| Reserve and Surplus | 1,00,000 |
| 2. Non-Current Liabilities | |
| Long term Borrowings 10% Debentures | 2,00,000 |
| 3. Current Liabilities | |
| Trade Payable | 50,000 |
| Total | 6,50,000 |
| II. Assets | |
| 1. Non-Current Assets | |
| Fixed Assets | 4,00,000 |
| Intangible Assets | 50,000 |
| Deferred tax Assets (Net) | |
| Other Non-current Assets | |
| Unamortised Loss on Issue of Debt | 60,000 |
| II. Current Assets | |
| Other Current Assets | 1,00,000 |
| Unamortised Loss on Issue of debentures | 40,000 |
| Total | 6,50,000 |
Calculation of Shareholders’ Funds
| Particulars |
Debit | Credit |
|---|---|---|
| (i) Liability side approach | ||
| Share Capital | ₹ 3,00,000 | |
| Reserves & Surplus | ₹ 1,00,000 | |
| ₹ 4,00,000 | ||
| Less : | ||
| Unamortised Loss on Issue of Debt | ₹ 60,000 | |
| Discount on Debentures | ₹ 40,000 | ₹ 1,00,000 |
| Shareholders Fund | ₹ 3,00,000 | |
| (ii) Asset side approach | ||
| Fixed Assets | ₹ 4,00,000 | |
| Intangible Assets | ₹ 50,000 | |
| Intangible Assets | ₹ 1,00,000 | |
| ₹ 5,50,000 | ||
| Less : | ||
| Trade Payable | ₹ 2,00,000 | |
| 10% Debentures | ₹ 50,000 | ₹ 2,50,000 |
| Shareholders Fund | ₹ 3,00,000 |
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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