Question 112 Chapter 4 of +2-B

Question 112 Chapter 4 of +2-B

Miscellaneous (Analytical Questions)

112. (Liquid Ratio/GP Ratio/Debt Equity Ratio) From the following information calculate the following ratios (i) Liquid Ratio (ii) Gross Profit Ratio (iii) Debt Equity Ratio Information :

 
Net Sales (Revenue from Operation) 4,00,000
Opening Inventory10,000
Closing Inventory 3,000 Less than opening inventory 
Net purchases 80% of Net sales 
Direct Expenses20,000
Current Assets1,00,000
Prepaid Expenses 3,000
Current Liabilities60,000
9% Debentures4,00,000
Long term Loans from bank1,50,000
Equity Share capital8,00,000
8% Preference share capital3,00,000

The solution of Question 112 Chapter 4 of +2-B: – 

 

(i) Liquid Ratio=Liquid Assets
Current Liabilities
   
 =₹ 94,000
 ₹ 60,000
 =1.57: 1

(ii) Gross Profit Ratio

=Gross ProfitX100
Net Sales
     
 =₹ 57,000X100
 ₹ 4,00,000
 =14.25%  
(iii) Debt Equity Ratio=Debt
Equity
   
 =₹ 5,50,000
 ₹ 11,00,000
 =0.5: 2

 


Working Notes :

Liquid Assets=Current Assets – Closing Stock – Prepaid Expenses
 =₹ 1,00,000 – ₹ 3,000 – ₹ 3,000
 =₹ 94,000
Cost of goods Sold=Opening Stock + Purchases + Direct Expenses – Closing Stock*
 =₹ 10,000 + ₹ 4,00,000 x 80% + ₹ 20,000 – ₹ 7,000
 =₹ 3,43,000
Gross Profit=Sales – Cost of goods Sold
 =₹ 4,00,000 – ₹ 3,43,000
 =₹ 57,000
*Closing Stock=3,000 Less than opening inventory
 =₹ 10,000 – ₹ 3,000
 =₹ 7,000
Debt=9% Debentures + Long from Bank
 =₹ 4,00,000 + ₹ 1,50,000
 =₹ 5,50,000
Equity=Equity Share Capital + 8% Preference Capital
 =₹ 8,00,000 + ₹ 3,00,000
 =₹ 11,00,000



Also, Check out the solved question of previous Chapters: –

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

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

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 3 min 225x300 - Question 112 Chapter 4 of +2-B  - USHA Publication  12 Class
T.S. Grewal’s Analysis of Financial Statements

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