Question 133 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 133 Chapter 4 of +2-B

Question 133 Chapter 4 of +2-B

Return on Capital Employed (or Return on Investment) Ratio

133. Following is the Balance Sheet of the Bharati Ltd. as at 31st March, 2019:

Particulars   Note No. Rs.
I. Equity and Liabilities       
1. Shareholders’ Funds      
(a) Share Capital     7,50,000
(b) Reserves and Surplus      
Surplus, i.e., Balance in Statement of Profit and Loss:      
Opening Balance  6,30,000    
Add: Transfer from Statement of Profit and Loss 14,58,000   20,88,000
2. Non-Current Liabilities      
15% Long-term Borrowings     24,00,000
2. Current Liabilities     12,00,000
Total     64,38,000
II. Assets      
1. Non-Current Assets       
a. Fixed Assets     27,00,000
b. Non-Current Investments:      
i. 10% Investments     3,00,000
ii. 10% Non-trade Investments     1,80,000
2. Current Assets     32,58,000
Total     64,38,000

You are required to calculate Return on Investment for the year 2018-19 with reference to Opening Capital Employed.

 

The solution of Question 133 Chapter 4 of +2-B: –

 

Interest on borrowings = Rs. 24,00,000 x 15%
  = Rs. 3,60,000
Net Profit before Tax = Net Profit after tax + Interest on borrowings – Interest received on Non-trade Investments
  = Rs. 14,58,000 + Rs. 3,60,000 – Rs. 18, 000
  = Rs. 18,00,000
Capital Employed = Shareholder’s Funds Opening + Non-Current Liabilities Opening– Non-Trade Investment
  = Rs. 7,50,000 + Rs. 6,30,000 + Rs. 24,00,000 – Rs 1,80,000
  = Rs. 36,00,000

 

 

Net Profit Ratio = Profit before Interest and Tax X 100
Capital Employed
Net Profit Ratio = Rs. 18,00,000 X 100
Rs. 36,00,000
  = 50%    

 

 

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)

  • Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
  • Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
  • Chapter No. 3 – Goodwill: Nature and Valuation
  • Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
  • Chapter No. 5 – Admission of a Partner
  • Chapter No. 6 – Retirement/Death of a Partner
  • Chapter No. 7 – Dissolution of a Partnership Firm

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)

  • Chapter No. 1 – Financial Statements of a Company
  • Chapter No. 2 – Financial Statement Analysis 
  • Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
  • Chapter No. 4 – Accounting Ratios
  • Chapter No. 5 – Cash Flow Statement

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

2 Book 3 min 225x300 - Question 133 Chapter 4 of +2-B  - T.S. Grewal 12 Class
T.S. Grewal’s Analysis of Financial Statements

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