Question 35 Chapter 4 of +2-B – USHA Publication 12 Class

Posted by By Shubham Sharma 3 Min Read July 13, 2024
Question 35 Chapter 4 of +2-B
Q-35- CH-4 Book 2 - Usha Pub. +2 Book 2020 - Solution

Question 35 Chapter 4 of +2-B

35. (Debt Equity Ratio/Proprietary Ratio) Calculate the following ratios from the balance sheet given below :
(a) Debt equity ratio (b) Proprietary ratio

Particulars ₹
I. Equity and Liabilities  
Shareholders’ Funds  
Equity Share capital 2,00,000
Preference Share Capital 50,000
Reserve and Surplus 50,000
Non Current Liabilities  
Long term Borrowings  
12% Mortgage Loan  2,20,000
10% Debentures 80,000
Current Liabilities  
Short term Borrowings   
Bank overdraft 50,000
Trade Payable 40,000
Outstanding Expenses 10,000
  7,00,000
II. Assets  
Non Current Assets  
Tangible Assets   
Fixed Assets 5,00,000
Current Assets  
Inventory 1,10,000
Trade Receivable 60,000
Prepaid Expenses 4,000
Cash in hand 26,000
  7,00,000

 

The solution of Question 35 Chapter 4 of +2-B: – 

(i) Debt Equity Ratio = Total Long term Debt
Shareholder’s Fund
Total Long term Debt = 12% Mortgage Loan + 10% Debentures
  = ₹ 2,20,000 + ₹ 80,000
  = ₹ 3,00,000
Shareholder’s Fund = Equity share Capital Preference share Capital + Reserves and Surplus
  = ₹ 2,00,000 + ₹ 50,000 + ₹ 50,000
  = ₹ 3,00,000
Debt Equity Ratio = ₹ 3,00,000
₹ 3,00,000
     
  = 1: 1

 

(ii) Proprietary Ratio = Proprietor’s Funds
Total Assets
Proprietor’s Funds = Equity share Capital Preference share Capital + Reserves and Surplus
  = ₹ 2,00,000 + ₹ 50,000 + ₹ 50,000
  = ₹ 3,00,000
Total Assets = Fixed Assets + Inventory + Trade Receivable + Prepaid Expenses +Cash at Bank
  = ₹ 5,00,000 + ₹ 1,10,000 + ₹ 60,000 + ₹ 4,000 + ₹ 26,000
  = ₹ 7,00,000
Debt Equity Ratio = ₹ 3,00,000
₹ 7,00,000
     
  = 0.43: 1

End of Solution

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Question 34 Chapter 4 of +2-B – USHA Publication 12 Class

Question 35 Chapter 4 of +2-B – USHA Publication 12 Class

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