Question 116 Chapter 4 of +2-B - USHA Publication 12 Class

Question 116 Chapter 4 of +2-B

Miscellaneous (Analytical Questions)

116. (GP Ratio/Current Ratio/Liquid Ratio) Following is the Profit and Loss Account and Balance Sheet of New Company Ltd. for the year ending 31st March, 2018.

STATEMENT OF PROFIT AND LOSS
Particulars		₹
Revenue from Operations (Sales)		4,00,400
Add Other Income
Non-Operating Income		4,800
Total Revenue		4,05,200
Less : Expenses
Cost of Goods Sold	2,40,400
(Opening Inventory + Purchases + Direct Expenses – Closing Inventory)
(₹ 61,000 + ₹ 2,52,200 + ₹ 5,600 – ₹ 78,400)
Administrative Expenses	80,800
Selling & Distribution Expenses	9,600
Financial Expenses	5,600
Other Non-Operating Expenses	1,600	3,38,000
Net Profit		67,200

BALANCE SHEET
Particulars	₹
I. Equity and Liabilities
Shareholders’ Funds
Equity Share Capital – Paid up	2,00,000
Preference Share Capital	80,000
Reserves and Surplus
General Reserve	4,800
Surplus in Statement of Profit and Loss	67,200
Current Liabilities
Short-term Borrowings
Bank Overdraft	2,800
Trade Payable	4,000
Other Current Liabilities
Output IGST	8,000
	3,66,800
II. Assets :
Non-Current Assets
Land and Building	2,00,000
Plant and Machinery	40,400
Current Assets
Inventory	78,400
Trade Receivable	36,000
Bank	10,000
Cash	2,000
	3,66,800

Calculate the following ratio : (i) Gross profit ratio (ii) Current ratio (iii) Liquidity ratio.

The solution of Question 116 Chapter 4 of +2-B: –

(i) Gross Profit Ratio	=	Gross Profit	X	100
		Net Sales

	=	₹ 1,60,000	X	100
		₹ 4,00,400
	=	39.96%

(ii) Current Ratio	=	Current Assets
(ii) Current Ratio	=	Current Liabilities

	=	₹ 1,26,400
	=	₹ 14,800
	=	8.54 : 1

(iii) Liquid Ratio	=	Liquid Assets
(iii) Liquid Ratio	=	Current Liabilities

	=	₹ 48,000
	=	₹ 14,800
	=	3.24: 1

Working Notes :-

Gross Profit	=	Sales – Cost of goods sold
	=	₹ 4,00,400 – ₹ 2,40,400
	=	₹ 1,60,000
Current Assets	=	Inventory + Trade Receivable + Bank + Cash
	=	₹ 78,400 + ₹ 36,000 + ₹ 10,000 + ₹ 2,000
	=	₹ 1,26,400
Current Liabilities	=	Bank overdraft + Trade Payable + Output IGST
	=	₹ 2,800 + ₹ 4,000 + ₹ 8,000
	=	₹ 14,800
Liquid Assets	=	Trade Receivable + Bank + Cash
	=	₹ 36,000 + ₹ 10,000 + ₹ 2,000
	=	₹ 48,000

End of Solution

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