Question 147 Chapter 4 of +2-B
Table of Contents
Miscellaneous
147. From the following informations, calculate Return on Investment or Return on Capital Employed :
| Rs | |
| Share Capital | 5,00,000 |
| Reserves and Surplus | 2,50,000 |
| Net Fixed Assets | 22,50,000 |
| Non-current Trade Investments | 2,50,000 |
| Current Assets | 11,00,000 |
| 10% Long-term Borrowings | 20,00,000 |
| Current Liabilities | 8,50,000 |
| Long-term Provision | Nil |
The solution of Question 147 Chapter 4 of +2-B: –
I
| Net Profit before tax | = | Rs 6,00,000 |
| Net Profit before interest, tax and dividend | = | Net Profit before tax + Interest on long-term borrowings |
| = | Rs 6,00,000 + Rs 2,00,000 | |
| = | Rs 8,00,000 | |
| Capital Employed | = | Share Capital + Reserves and Surplus + Long-term borrowings |
| = | Rs 5,00,000 + Rs 2,50,000 + Rs 20,00,000 | |
| = | Rs 27,50,000 |
| Return on Investment Ratio | = | Net Profit before interest, tax and dividend | X | 100 |
| Capital Employed |
| Return on Investment Ratio | = | Rs. 8,00,000 | X | 100 |
| Rs 27,50,000 | ||||
| = | 29.09% |
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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)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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
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