# Question 26 Chapter 4 of +2-B – USHA Publication 12 Class

Q-26- CH-4 Book 2 - Usha Pub. +2 Book 2020 - Solution

Question 26 Chapter 4 of +2-B

II. Solvency (Long-Term) Ratio

26. (Debt Equity Ratio) From the following Balance Sheet of XY Limited calculate Debt Equity Ratio

 Balance Sheet of XY Limited As at 31st March 2018 Particular ₹ I. Equity and Liabilities 1. Shareholders’ Funds Equity Share Capital 7,00,000 Reserves and Surplus 2,00,000 2. Non-Current Liabilities Long-term Borrowing : 10% Debentures 6,00,000 3. Current Liabilities Trade Payable 90,000 Short term Provision 20,000 Total 16,10,000 II. Assets : 1. Non-Current Assets Fixed Assets Tangible Assets 10,00,000 Intangible Assets 3,00,000 Other Non current Assets Unamortised Loss on issue of debenture 50,000 2. Current Assets Inventory 2,50,000 Other Current Assets Prepaid Expenses 10,000 Total 16,10,000

## The solution of Question 26 Chapter 4 of +2-B: –

 Debt Equity Ratio = Debt Shareholders Funds
 Debt = 10% Debentures = ₹ 6,00,000 Shareholders Funds = Share Capital + Reserves = ₹ 7,00,000 + ₹ 2,00,000 = ₹ 9,00,000
 Debt Equity Ratio = ₹ 6,00,000 ₹ 9,00,000 = 2: 3

What are Liquidity Ratios – Formulas and Examples

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

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