Question 25 Chapter 4 of +2-B
Table of Contents
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
Comment if you have any question.
Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
