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Question 132 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 132 Chapter 4 of +2-B
Question No. 132- Chapter No.4 - T.S. Grewal +2 Book Part B

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Question 132 Chapter 4 of +2-B

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Return on Capital Employed (or Return on Investment) Ratio

132. From the following Balance Sheet of Global Ltd., you are required to calculate Return on Investment for the year 2018-19:

BALANCE SHEET OF GLOBAL LTD. as at 31st March, 2019
ParticularsNote No.Rs.
I. Equity and Liabilities   
1. Shareholders’ Funds  
(a) Share Capital 5,00,000
(b) Reserves and Surplus 4,20,0000
2. Non-Current Liabilities  
15% Long-term Borrowings 16,00,000
2. Current Liabilities 8,00,000
Total 33,20,000
II. Assets  
1. Non-Current Assets   
a. Fixed Assets (Tangible Assets) 16,00,000
b. Non-Current Investments:  
i. 10% Investments 2,00,000
ii. 10% Non-trade Investments 1,20,000
2. Current Assets 14,00,000
Total 33,20,000

Additional Information: Net Profit before Tax for the year 2018-19 is Rs 9,72,000.

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The solution of Question 132 Chapter 4 of +2-B: –

 

Interest on borrowings=Rs. 2,40,000
Net Profit before Tax=Rs. 9,72,000
Net Profit before Interest and Tax=Rs. 9,72,000 + Rs. 2,40,000
 =Rs. 12,12,000

Net Profit before Interest and Tax excluding interest on Non −trade investments

 =Rs. 12,12,000 – Rs. 12,000
 =Rs. 12,00,000
Capital Employed=Shareholder’s Funds + Non-Current Liabilities – Non-Trade Investment
 =Rs. 5,00,000 + Rs. 4,20,000 + Rs. 16,00,000 – Rs 1,20,000
 =Rs. 24,00,000

 

Net Profit Ratio=Profit before Interest and TaxX100
Capital Employed
Net Profit Ratio=Rs. 12,00,000X100
Rs. 24,00,000
 =50%  

 

 

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Balance Sheet: Meaning, Format & Examples

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

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

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

Question 1 Chapter 1 of +2-B
T.S. Grewal’s Analysis of Financial Statements

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