Question 119 Chapter 4 of +2-B – USHA Publication 12 Class

Question 119 Chapter 4 of +2-B

Question 119 Chapter 4 of +2-B

Miscellaneous (Analytical Questions)

119. (Operating Ratio/Liquid Ratio/Proprietary Ratio) From the following information calculate the
(a) Operating ratio (b) Liquid Ratio (c) Proprietary Ratio Information :
Cash Sales (Revenue from Operation) ₹ 4,00,000, Credit Sales ₹ 2,75,000. Sales Returns ₹ 27,000 Cost of Revenue from operation ₹ 3,90,000. Selling and Distribution Expenses ₹ 7,000. Administration Expenses ₹ 3,000. Current Liabilities ₹ 1,95,000. Current Assets ₹ 3,94,000. Closing Inventories ₹ 23,000. Equity share capital ₹ 4,37,000. 6% Preference share capital ₹ 1,74,000. Fixed Assets ₹ 4,30,000.

The solution of Question 119 Chapter 4 of +2-B: – 

 

(i) Operating Ratio

= Operating Cost X 100
Net Sales
         
  = ₹ 4,00,000 X 100
  ₹ 6,48,000
  = 61.72%    

 

(ii) Liquid Ratio

= Quick Assets
Current Liabilities
     
  = ₹ 3,71,000
  ₹ 1,95,000
  = 1.9: 1
(iii) Proprietary Ratio = Shareholder’s Fund
Total Assets
     
  = ₹ 6,11,000
  ₹ 8,24,000
  = 0.74: 1

 

Working Notes:-

Net Sales = Cash sales + Credit Sales – Sales Return
  = ₹ 4,00,000 + ₹ 2,75,000 – ₹ 27,000
  = ₹ 6,48,000
Quick Assets = Current Assets – Stock
  = ₹ 3,94,000 – ₹ 23,000
  = ₹ 3,71,000
Shareholder’s Fund = Equity Share Capital + Preference Share Capital
  = ₹ 4,37,000 + ₹ 1,74,000
  = ₹ 6,11,000
Total Assets = Current Assets + Fixed Assets
  = ₹ 3,94,000 + ₹ 4,30,000
  = ₹ 8,24,000


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

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