Question 26 Chapter 4 of +2-B

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 
I. Equity and Liabilities  
1. Shareholders’ Funds 
Equity Share Capital7,00,000
Reserves and Surplus2,00,000
2. Non-Current Liabilities 
Long-term Borrowing : 
10% Debentures6,00,000
3. Current Liabilities  
Trade Payable90,000
Short term Provision20,000
II. Assets : 
1. Non-Current Assets 
Fixed Assets 
Tangible Assets10,00,000
Intangible Assets3,00,000
Other Non current Assets 
Unamortised Loss on issue of debenture50,000
2. Current Assets 
Other Current Assets 
Prepaid Expenses10,000


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

Comment if you have any question.

Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

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

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 3 min 225x300 - Question 26 Chapter 4 of +2-B  - USHA Publication  12 Class
T.S. Grewal’s Analysis of Financial Statements

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