Question 117 Chapter 4 of +2-B

Question 117 Chapter 4 of +2-B

Miscellaneous (Analytical Questions)

117. (Quick Ratio/Inventory T/O Ratio/Return on Shareholders’ Investment) The following are the Summarised Statement of Profit and Loss of Hindustan Products for the year ended 31.3.2018 and the Balance sheet of the company as of that date.

STATEMENT OF PROFIT AND LOSS   
Particulars 
Revenue from Operations  8,00,000
Less : Expenses  
Purchases 5,45,000 
Changes in Inventories (1,00,000) 
(Opening Inventory – Closing Inventory)   
(₹ 99,000 – ₹ 1,99,000)   
Direct Expenses15,000 
Selling & Distribution Expenses2,40,000 
Loss on Sale of Assets 40,0007,40,000
Net Profit  60,000

 

BALANCE SHEET  
Particulars 
I. Equity and Liabilities 
Shareholders’ Funds 
Equity Share Capital2.90.000
Reserves and Surplus 
Surplus in Statement of Profit and Loss 60,000
Current Liabilities 
Trade Payable1,15,000
Outstanding Expenses15,000
 4,80,000
II. Assets :  
Non-Current Assets  
Tangible Assets 
Land 2,30,000
Current Assets 
Inventory 1,99,000
Trade Receivable21,000
Cash30,000
 4,80,000

Calculate the following ratios
(i) Quick ratio (ii) Inventory Turnover Ratio (ii) Return on Shareholders Investment

The solution of Question 117 Chapter 4 of +2-B: – 

 

(i) Quick Ratio

=Quick Assets
Current Liabilities
   
 =₹ 51,000
 ₹ 1,30,000
 =0.39 : 1
(ii) Inventory Turnover Ratio=Cost of goods sold
Average Inventory
   
 =₹ 4,60,000
 ₹ 1,49,000
 =3.08 times

 

(i) Return on investment Ratio

=Net ProfitX100
Shareholders Funds
     
 =₹ 60,000X100
 ₹ 3,50,000
 =17.14%  

 

Working Notes:-

Quick Assets=Trade Receivable + Cash
 =₹ 21,000 + ₹ 30,000
 =₹ 51,000
Current Assets=Inventory + Trade Receivable + Bank + Cash
 =₹ 78,400 + ₹ 36,000 + ₹ 10,000 + ₹ 2,000
 =₹ 1,26,400
Current Liabilities=Trade Payable + Outstanding Expenses
 =₹ 1,15,000 + ₹ 15,000
 =₹ 1,30,000
Cost of goods sold=Opening stock + Purchases + Direct Expenses – Closing Stock
 =₹ 99,000 + ₹ 5,45,000 + ₹ 15,000 – ₹ 1,99,000
 =₹ 4,60,000
Shareholders’ Funds=Share capital + Surplus in Statement of Profit & Loss
 =₹ 2,90,000 + ₹ 60,000
 =₹ 3,50,000
Average Inventory=Opening Inventory + Closing Stock
2
   
 =₹ 99,000 + ₹ 1,99,000
 2
 =₹ 1,49,000



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 117 Chapter 4 of +2-B  - USHA Publication  12 Class
T.S. Grewal’s Analysis of Financial Statements

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