Question 11 Chapter 4 of +2-B – USHA Publication 12 Class

Question 11 Chapter 4 of +2-B

I. Liquidity Ratios

11. (Short Term Financial Position) Following is the balance sheet of Crescent Chemical Works Limited as of 31st March 2018

Balance Sheet
Particular	Note No.	₹
I. Equity and Liabilities
Shareholders’ Funds
6% Preference Share Capital: Issued and Paid-up		15,000
Equity Share Capital: Issued and Paid-up		55,000
Reserves and Surplus
General Reserve		25,000
Reserves for Contingencies		10,000
Non-Current Liabilities
Long-term Borrowing :
6% Mortgage Debentures		25,000
Current Liabilities
Trade Payable		11,000
Other Current Liabilities :
Outstanding Expenses		2,000
Output IGST		2,000
Output CGST		2,500
Output SGST		2,500
		1,50,000
II. Assets :
Non-Current Assets
Tangible Assets
Land and Building		20,000
Plant and Machinery		22,000
Furniture and Fixtures		3,000
Current Assets
Trade Investment		5,000
Inventory		50,000
Trade Receivable		30,000
Prepaid Expenses		2,000
Cash at Bank		18,000
		1,50,000

 

The solution of Question 11 Chapter 4 of +2-B: – 

 

Current Assets	=	Inventories + Trade receivables + Trade Investments + Prepaid expenses + Cash
	=	₹ 50,000 + ₹ 30,000 + ₹ 5,000 + ₹ 2,000 + ₹18,000
Current Assets	=	₹ 1,05,000

 

Current Liabilities	=	Trade payable + Outstanding Expenses + Output IGST + Output CGST + Output SGST
	=	₹ 11,000 + ₹ 2,000 + ₹ 2,000 + ₹ 2,500 + ₹ 2,500
Current Liabilities	=	₹ 20,000

 

Current Ratio=	Current Assets
	Current Liabilities

 

Current Ratio	=	₹ 1,05,000
		₹ 20,000
	=	5.25 : 1

 

Quick Assets	=	Trade receivables + Trade Investments + Cash
	=	₹ 30,000 + ₹ 5,000 + ₹ 18,000
Quick Assets	=	₹ 53,000
Current Liabilities	=	₹ 20,000

Quick Ratio	=	Quick Assets
		Current Liabilities
	=	₹ 53,000
		₹ 20,000
Quick Ratio	=	2.65 : 1

What are Liquidity Ratios – Formulas and Examples

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Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

• Chapter No. 1 – Accounting Not for Profit Organisations
• Chapter No. 2 – Partnership Accounts – I (Introduction)
• Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
• Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
• Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
• Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
• Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
• Chapter No. 8 – Company Accounts (Share Capital)
• Chapter No. 9 – Company Accounts (Issue of Debentures)
• Chapter No. 10 – Company Accounts (Redemption of Debentures)

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

• Chapter No. 1 – Financial Statements of a Company
• Chapter No. 2 – Financial Statement Analysis
• Chapter No. 3 –  Tools of Financial Statement Analysis- Comparative and Common Size
• Chapter No. 4 – Ratio Analysis
• Chapter No. 5 – Cash Flow Statement

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