
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 Content covered in this article:
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
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Chapter No. 1 – Accounting Not for Profit Organisations
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Chapter No. 2 – Partnership Accounts – I
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Chapter No. 3 – Partnership Accounts – II (Introduction)
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Chapter No. 4 – Partnership Accounts – III (Goodwill: Nature and Valuation)
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Chapter No. 5 – Partnership Accounts – IV (Reconstitution of Partnership)
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Chapter No. 6 – Partnership Accounts – V (Admission of A Partner)
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Chapter No. 7 – Partnership Accounts – VI (Retirement and Death of A Partner)
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Chapter No. 8 – Company Accounts (Share Capital)
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Chapter No. 9 – Company Accounts (Issue of Debentures)
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Chapter No. 10 – Company Accounts (Redemption of Debentures
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
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Chapter No. 1 – Financial Statements of a Company (Balance Sheet Only)
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Chapter No. 2 – Techniques of Financial Statement Analysis
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Chapter No. 3 – Ratio Analysis
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Chapter No. 4 – Cash Flow Statement
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