Question 39 Chapter 4 of +2-B
Table of Contents
Debt to Equity Ratio
39. Balance Sheet had the following amounts as at 31st March 2019:
| Rs. | Rs. | ||
| 10% Preference Share Capital | 5,00,000 | Current Assets | 12,00,000 |
| Equity Share Capital | 15,00,000 | Current Liabilities | 8,00,000 |
| Securities Premium Reserve | 1,00,000 | Investments (in other companies) | 2,00,000 |
| Reserve and Surplus | 4,00,000 | Fixed Assets – Cost | 60,00,000 |
| Long-term Loan from IDBI @ 9% | 30,00,000 | Depreciation is written off | 14,00,000 |
Calculate ratios indicating the Long-term and the Short-term financial position of the company.
The solution of Question 39 Chapter 4 of +2-B: –
| Equity | = | 10% Preference Share Capital + Equity Share Capital + Reserves and Surplus |
| = | Rs.5,00,000 + Rs.15,00,000 + Rs.4,00,000 | |
| Equity | = | Rs. 24,00,000 |
| Debt | = | loan from IDBI @ 9% |
| Debt | = | Rs. 30,00,000 |
| Debt to Equity Ratio | = | Long-term Debts | = | Rs.30,00,000 |
| Shareholder’s Funds | Rs.24,00,000 | |||
| = | 1.5: 1 |
Current Ratio
| Current Assets | = | Rs.12,00,000 |
| Current Liabilities | = | Rs.8,00,000 |
| Current Ratio | = | Current Assets | = | Rs.12,00,000 |
| Current Liabilities | Rs.8,00,000 | |||
| = | 6: 1 |
Balance Sheet: Meaning, Format & Examples
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Also, Check out the solved question of previous Chapters: –
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
