Question 22 Chapter 2 VK Publications Class 12 Part 2 – 2021

Question no. 22 VK Publications
Question no. 22 VK Publications

Question 22 Chapter 2 VK Publications Class 12 Part 2 – 2021

22. Prepare a Common Size Balance Sheet and comment on the financial position of X Ltd.and Y Ltd. The Balance Sheets of X Ltd. and Y Ltd. as on 31st March,2018 are given below:

Particulars 2018 (Rs.) 2017 (Rs.)
I.EQUITY AND LIABILITIES      
 1. Shareholders’ Funds      
(a) Share Capital   9,00,000 12,00,000
(b) Reserves and Surplus   4,00,000 3,50,000
2. Current Liabilities      
(a) Short-term Borrowings   2,00,000 2,50,000
Total   15,00,000 18,00,000
       
II. ASSETS      
1. Non-Current Asset      
(a) Fixed Assets   10,00,000 16,00,000
2. Current Assets      
(a) Cash and Cash Equivalents   5,00,000 2,00,000
Total   15,00,000 18,00,000

The solution of Question 22 Chapter 2 VK Publications Class 12 Part 2: –

Common Size Balance Sheet Statement For the years ended 31st March, 2017 and 2018

Particulars Note Absolute Amounts Percentage of the Balance sheet Total
    X Ltd. Y Ltd. X Ltd. Y Ltd.
    Rs. Rs. % %
           
I. Equity & Liabilities          
1. Shareholder’s Fund          
a. Share Capital   9,00,000 12,00,000 60.00 66.67
b. Reserve & Surplus   4,00,000 3,50,000 26.67 19.44
2. Current Liabilities          
a. Long term Borrowings   2,00,000 2,50,000 13.33 13.89
Total   15,00,000 18,00,000 100.00 100.00
           
II. Assets          
1. Non – current Assets          
a. Fixed Assets   10,00,000 16,00,000 66.67 88.89
2. Current Assets          
a. Cash & Cash equivalent   5,00,000 2,00,000 33.33 11.11
Total   15,00,000 18,00,000 100.00 100.00

Comment:
(i) The short-term financial position of X Ltd. is better as compared to Y Ltd. as currentliabilities of X Ltd. are 13.33% of total funds invested and current assets are 33.33% ofthese funds. On the other hand, current liabilities of Y Ltd. are 13.89% of total funds and current assets are 11.11% of these funds.
(ii) Y Ltd. has invested more (88.89%) in fixed assets as composed to X Ltd. (66.67%).
(iii) The long-term financial position of both companies is almost equal and sound. Net worth is 86.67% (60 + 26.67) of total funds in case of X Ltd. and 86.11% (66.67 + 19.44) of total : funds in case of Y Ltd.

Financial Statement Analysis and its tools or Techniques

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

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