Question 144 Chapter 4 of +2-B

Question 144 Chapter 4 of +2-B

Miscellaneous

144. From the following, calculate (a) Debt to Equity Ratio; (b) Total Assets to Debt Ratio; and (c) Proprietary Ratio:

 Rs Rs
Equity Share Capital 75,000Debentures75,000
Preference Share Capital25,000Trade Payable40,000
General Reserve45,000Outstanding Expenses10,000
Balance in Statement of Profit and Loss 30,000  

 

The solution of Question 144 Chapter 4 of +2-B: –

I

Long-term Debts=Rs 75,000
Equity=Equity Share Capital + Preference Share Capital + General Reserve + Balance in Statement of Profit & Loss
 =Rs 75,000 + Rs 25,000 + Rs 45,000 + Rs 30,000
 =Rs 1,75,000
Debt – Equity Ratio=Long-term Debts
Equity
Gross Profit Ratio=Rs. 75,000
Rs 1,75,000
 =0.43 : 1
   

 

II

Total Assets=Equity Share Capital + Preference Share Capital + General Reserve + Balance in Statement of Profit & Loss + Debentures + Trade Payables + Outstanding Expenses
 =Rs 75,000 + Rs 25,000 +Rs 45,000 + Rs 30,000 + Rs 75,000 + Rs 40,000 + Rs10,000
 =Rs 3,00,000
Long term Debts=Rs 75,000
Total Assets to Debts Ratio=Total Assets
Long term Debts
 =Rs. 3,00,000
Rs 75,000
 =4 : 1

 

III

Shareholders’ Funds=Equity Share Capital + Preference Share Capital + General Reserve + Balance in Statement of Profit & Loss
 =75,000+25,000+45,000+30,000
 =Rs 1,75,000
Total Assets=Equity Share Capital + Preference Share Capital + General Reserve +Balance in Statement of Profit & Loss + Debentures + Trade Payables + Outstanding Expenses
 =Rs 75,000 + Rs 25,000 + Rs 45,000 + Rs 30,000 + Rs 75,000 + Rs 40,000 + Rs 10,000
 =Rs 3,00,000
Proprietary Ratio=Shareholders’ Funds
Total Assets
 =Rs. 1,75,000
Rs 3,00,000
 =0.58 : 1



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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

2 Book 3 min 225x300 - Question 144 Chapter 4 of +2-B  - T.S. Grewal 12 Class
T.S. Grewal’s Analysis of Financial Statements

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