Question 112 Chapter 4 of +2-B
Table of Contents
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 Inventory | 10,000 |
| Closing Inventory 3,000 Less than opening inventory | |
| Net purchases 80% of Net sales | |
| Direct Expenses | 20,000 |
| Current Assets | 1,00,000 |
| Prepaid Expenses | 3,000 |
| Current Liabilities | 60,000 |
| 9% Debentures | 4,00,000 |
| Long term Loans from bank | 1,50,000 |
| Equity Share capital | 8,00,000 |
| 8% Preference share capital | 3,00,000 |
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 Profit | X | 100 |
| Net Sales | ||||
| = | ₹ 57,000 | X | 100 | |
| ₹ 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
- 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
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
