# Question 25 Chapter 4 of +2-B – USHA Publication 12 Class

Q-25- CH-4 Book 2 - Usha Pub. +2 Book 2020 - Solution

Question 25 Chapter 4 of +2-B

II. Solvency (Long-Term) Ratio

25. (Debt Equity Ratio) Calculate Debt Equity Ratio from the Balance Sheet of X Limited as on 31st March 2018:

 Particular Note No. ₹ I. Equity and Liabilities Shareholders’ Funds Equity Share Capital 80,000 Shares of ₹10 each fully paid up 8,00,000 11% Redeemable Preference Share Capital 4,000 shares of ₹100 each fully paid up 4.00.000 Reserves and Surplus Securities Premium Reserve 80,000 General Reserve 5,80,000 Surplus i.e.. balance in statement of Profit and Loss 1,40,000 Non-Current Liabilities Long-term Borrowing : 12% Debentures 10,00,000 10,000 Debentures of ₹100 each Current Liabilities Trade Payable 2,20,000 Outstanding Expenses 60,000 Provisions Provision for Taxation 2,20,000 35,00,000 II. Assets : Non-Current Assets Tangible Assets Land and Building 6,20,000 Plant and Machinery 12,00,000 Furniture and Fittings 1,80,000 Current Assets Inventory 5,30,000 Trade Receivable 6,05,000 Cash at Bank 3,00,000 Cash in hand 65,000 35,00,000

## The solution of Question 25 Chapter 4 of +2-B: –

 Debt Equity Ratio = Debt Shareholders Funds
 Debt = 12% Debentures = ₹ 10,00,000 Shareholders Funds = Equity Share Capital + Preference Share Capital + Securities Premium Reserve + General Reserve + Balance of Statement of P&L = ₹ 8,00,000 + ₹ 4,00,000 + ₹ 80,000 + ₹ 5,80,000 + ₹ 1,40,000 = ₹ 20,000,00
 Debt Equity Ratio = ₹ 10,00,000 ₹ 20,00,000 = 1: 2

What are Liquidity Ratios – Formulas and Examples

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## Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

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