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Question 143 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 143 Chapter 4 of +2-B
Question No. 143- Chapter No.4 - T.S. Grewal +2 Book Part B

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Question 143 Chapter 4 of +2-B

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Miscellaneous

143. On the basis of the following information calculate:
(i) Debt to Equity Ratio; and
(ii) Working Capital Turnover Ratio.
Information:

  Rs Rs 
Revenue from Operations(a) Cash Sales40,00,000Paid-up Share Capital17,00,000
 (b) Credit Sales20,00,0006% Debentures 3,00,000
Cost of Goods Sold 35,00,0009% Loan from Bank7,00,000
Other Current Assets 8,00,000Debentures Redemption Reserve3,00,000
Current Liabilities 4,00,000Closing Inventory1,00,000

 

The solution of Question 143 Chapter 4 of +2-B: –

I

Long-term Debts=6% Debentures + 9% Loan from Bank
 =Rs 3,00,000 – Rs 7,00,000
 =Rs 10,00,000
Equity=Paid-up Share Capital + Debenture Redemption Reserve
 =Rs 17,00,000 – Rs 3,00,000
 =Rs 20,00,000
Debt – Equity Ratio=Long-term Debts
Equity
Gross Profit Ratio=Rs. 10,00,000
Rs 20,00,000
 =0.5 : 1
   

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II

Current Assets=Other Current Assets + Inventory
 =Rs 8,00,000 + Rs 1,00,000
 =Rs 9,00,000
Working Capital=Current Assets − Current Liabilities
 =Rs 9,00,000 – Rs 4,00,000
 =Rs 5,00,000
Net Sales=Cash Sales + Credit sales
 =Rs 40,00,000 + Rs 20,00,000
 =Rs 60,00,000
Working Capital Turnover Ratio=Net Sales
Working Capital
Operating Ratio=Rs. 60,00,000
Rs 5,00,000
 =12 Times

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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)

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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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