Following information is given to you- - Rs- 11 hline t e x t R e v e n u e f r o m O p e r a t i o n s - 4-40-000 1text Less- Purchases - 2-50-000 - extChanges in Inventories -lend array beginarray c 1 1extBALANCE SHEET as at 31st March- 2018- -Particulors - Note - Rs- - - N No - WhlineI- - textEQUITY AND LIABILITIES- - - 1- Shareholder-s Funds- - l- a Share Capital - 3-00-000 11- a Trade Payables - 1-50-000 1- b Other Current Liabilities - 2 - 50-000 1 II - - ASSETS - - - Non-Current Assets - 4-00-000 1- textCurrent Assets - - 1

(i) Current Ratio nbsp; nbsp; nbsp; nbsp; nbsp; = Current Assets/Current Liabilities Current Assets nbsp; nbsp; nbsp; nbsp; = Invento ...

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Byju's Answer

Standard XII

Accountancy

Preparing CFS-Direct Method

Following inf...

Question

Following information is given to you :

$\begin{matrix} Rs. Revenue from Operations & 4, 40, 000 Less: Purchases & 2, 50, 000 Changes in Inventories (Opening Inventory - Closing Inventory)(40,000 - 20,000) & 20, 000 Direct Expenses & 30, 000 - ------ - & 3, 00, 000 - -------- - Gross Profit & 1, 40, 000 - -------- - \end{matrix}$

$\begin{matrix} BALANCE SHEET a s a t 31 s t M a r c h, 2018 \end{matrix} \begin{matrix} P a r t i c u l o r s & N o t e & Rs. N o I . & EQUITY AND LIABILITIES: Shareholder's Funds: (a) Share Capital & 3, 00, 000 (b) Reserve and Surplus & 1 & 1, 00, 000 Current Liabilities : (a) Trade Payables & 1, 50, 000 (b) Other Current Liabilities & 2 & 50, 000 TOTAL & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 6, 00, 000 - -------- - II . & ASSETS : Non-Current Assets & 4, 00, 000 Current Assets : (a) Inventory & 20, 000 (b) Trade Receivable & 1, 00, 000 (c) Cash & Cash Equivalents & 80, 000 TOTAL & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 6, 00, 00 - ------- - \end{matrix}$

Notes : (1) Reserve & Surplus :

Profit & Loss Balance $1, 00, 000 - -------- -$

(2) Other Current Liabilities

Outstanding Salary $50, 000 - ------ -$

On the basis of the informations given above, calculate any two of the following ratios :

(i) Current Ratio,

(ii) Inventory Turnover Ratio, and

(iii) Proprietary Ratio.

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Solution

(i) Current Ratio
= $\frac{C u r r e n t A s s e t s}{C u r r e n t L i a b i l i t i e s}$

Current Assets
= Inventory + Trade Receivables + Cash
= Rs. 20,000 + Rs. 1,00,000 + Rs. 80,000
= Rs. 2,00,000

Current Liabilities
= Trade Payables + Outstanding Salary
= Rs. 1,50,000 + Rs. 50,000
= Rs. 2,00,000

(ii) Current Ratio
= $\frac{R s . 2, 00, 000}{R s . 2, 00, 000} = 1 : 1$

Cost of Revenue from Operations
= Revenue from Operations - Gross Profit
= Rs. 4,40,000 - Rs. 1,40,000
= Rs. 3,00,000

Average Inventory
= $\frac{O p e n i n g I n v e n t o r y + C l o s i n g I n v e n t o r y}{2}$

= $\frac{R s . 40, 000 + R s . 20, 000}{2}$
= Rs. 30,000

Inventory Turnover Ratio = $\frac{R s . 3, 00, 000}{R s . 30, 000} = 10 t i m e s$

(iii) Proprietary Ratio
= $\frac{Shareholder's Fund}{T o t a l A s s e t s}$

Shareholder's Fund
= Share Capital + Profit and Loss Balance
= Rs. 3,00,000 + Rs. 1,00,000
= Rs. 4,00,000

Proprietary Ratio = $\frac{R s . 4, 00, 000}{R s . 6, 00, 000} \times 100 = 66.67$ %

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Similar questions

Calculate (i) Debt-Equity Ratio; (ii) Total Assets to Debt Ratio; and (iii) Proprietary Ratio from the following particulars :

$\begin{matrix} Particulars & Rs. Equity Share Capital & 3, 00, 000 Preference Share Capital & 1, 00, 000 General Reserve & 60, 000 Profit & Loss Balance & 40, 000 12 % Mortgage Loan & 1, 80, 000 Current Liabilities & 1, 20, 000 Non Current Assets & 4, 50, 000 Current Assets & 3, 50, 000 \end{matrix}$

What conclusions do you draw from the above ratios ?

The Statement of Profit and Loass of an enterprise for the year ended 31st March, 2018, stood as follows:

$\begin{matrix} Particulars & Note & Amount No. I. Revenue from Operations & 1, 38, 0000 II. Other Income & 1 & 1, 60, 000 - -------- - III. Total Revenue & 1, 5, 40000 - --------- - IV. Expenses Purchases & 9, 30, 000 Changes in Inventories (Opening Inventory - Closing Inventory) (1,00,000 - 1,30,000) & (30, 000) Emplyee Benefit Expenses & 1, 15, 000 Depreciation and Amortization Expenses & 2 & 87, 000 Other Expenses & 3 & 3, 50, 000 - -------- - Total Expenses & 1, 45, 2000 V. Profit Before Tax (III - IV) & 88, 000 \end{matrix}$
Notes:
(1)
$\begin{matrix} Other Income: Divident Received & 40, 000 Profit on Sale of Building Book Value (5, 00, 000) Sold for 6, 20, 000 - -------- - & 1, 20, 000 - -------- - 1, 60, 000 - -------- - \end{matrix}$
(2) $\begin{matrix} Depreciation and Amortization Expenses: Depreciation & 55, 000 Goodwill written off & 20, 000 - ------ - 75, 000 - ------ - \end{matrix}$
(3) $\begin{matrix} Other Expenses: Office Expenses & 31, 0000 Selling and Distribution Expenses & 40, 000 Share Issue Expenses Written off & 12, 000 - ------ - 3, 62, 000 - -------- - \end{matrix}$

Additional Information: Rs.
1. Manufacturing Wages Outstanding 50,000
2. Salaries Outstanding 40,000
3. Salaries Prepaid 5,000

Calculate the amount of cash generated from operating activites.

Prepare trading and profit and loss account from the following trial balance as on 31st March, 2016.
$\begin{matrix} Name of Accounts & Dr. Balance (Rs.) & Cr. Balance (Rs.) Cash in Hand & 20, 000 Cash at Bank & 1, 80, 000 Purchase and Sales & 22, 00, 000 & 35, 00, 000 Return Inwards & 60, 000 Return Outwards & 75, 000 Carriage on Purchases & 44, 000 Carriage on Sales & 21, 000 Fuel and Power & 1, 55, 000 Stock (1st April, 2015) & 3, 60, 000 Bad Debts & 62, 000 Bad Debts Provision & 25, 000 Debtors and Creditors & 8, 20, 000 & 3, 00, 000 Capital & 21, 70, 000 Investment & 2, 00, 000 Interest on Investments & 20, 000 Loan from X(@18% per annum) & 1, 00, 000 Repairs & 15, 200 General Expenses & 1, 06, 000 Land and Buildings & 18, 00, 000 Wages and Salaries & 1, 80, 000 Miscellaneous Receipts & 1, 200 Bills Payable & 52, 000 Stationery & 20, 000 - ----------- - & - ----------- - 62, 43, 200 & 62, 43, 200 \end{matrix}$

Additiional Information:
(i) Written off Rs. 20,000 as bad debts and provision for doubtful debts is to be maintained at 5% on debtors.
(ii) Loan from X was taken on 1st August, 2015. No Interest has been paid so far.
(iii) Included in general expenses is insurace premium Rs. 12,000, paid for one year ending 30th June, 2016
(iv) $\frac{1}{3}$ of wages and salaries is to be charged to trading account and the balance to profit and loss account.
(v) Entire stationery was used by the proprietor for his personal purpose.
(vi) Closing stock was valued at Rs. 5,00,000.

The profit of Philips Ltd. after appropriations was Rs. 2,50,000. This profit arrived at after taking into consideration the following items:
$\begin{matrix} S. No. & Particulars & Amount 1. & Depreciation on Fixed Tangible Assets (Machinery) & 20, 000 2. & Loss on Sale of Fixed Tangible Assets (Furniture) & 2, 000 3. & Goodwill written off & 9, 000 4. & Provision for Taxation & 35, 000 5. & Transfer to General Reserve & 17, 500 6. & Gain on Sale fo Fixed Tangible Assets (Machinery) & 8, 000 \end{matrix}$

Additional Information:

$\begin{matrix} Particulars & 31-03-2016 & 31-02-2017 Trade Receivables (All good) & 50, 000 & 62, 000 Trade Payables & 45, 000 & 55, 000 Inventory & 12, 000 & 8, 000 Income Received in Advance & 8, 000 & - Outstanding Expenses & 6, 000 & 3, 000 Prepaid Expenses & - & 5, 000 \end{matrix}$

From the following balance sheets of ABC Ltd., Find out cash from operating activities only:
$\begin{matrix} Particulars & Note No. & 31 - 03 - 2017 & 31 - 03 - 2016 I. Equity and Liabilities: (1) Shareholder's Funds: (a) Share Capital & 35, 000 & 30, 000 (b) Reserve and Surplus & 1 & 22, 000 & 3, 500 (2) Non - Current Liabilities Long term Borrowings & 2 & 25, 000 & 21, 000 (3) Current Liabilities Trade Payables & 12, 500 - ------ - & 8, 500 - ---- - Total & 94, 500 - ------ - & 63, 000 - ------ - II. Assets: (1) Non- Current Assets: (a) Fixed Assets (i) Tangible Assets & 3 & 41, 000 & 32, 000 (i i) Intangible Assets & 4 & 8, 000 & 10, 000 (b) Non Current Investments & 5 & 8, 000 & 3, 000 (2) Current Assets: (a) Inventory & 24, 500 & 6, 000 (b) Cash and Cash Equivalents & 13, 000 - ------ - & 12, 000 - ------ - Total & 94, 500 - ------ - & 63, 000 - ------ - \end{matrix}$
Notes:
$\begin{matrix} (1) & Reserve and Surplus: & 2017 & 2016 General Reserve & 15, 000 & 9, 500 Profit and Loss Balance & 7, 000 - ---- - & (6, 000) - ------ - 22, 000 - ------ - & 3, 500 - ---- - Bracket Denotes negative balance. (2) & Long- term Borrowings: 10 % Debentures & 25, 000 - ------ - & 21, 000 - ------ - (3) & Tangible Assets: Machinery & 54, 000 & 41, 000 (-) Provision for Depreciation & 13, 000 - ------ - & 9, 000 - ---- - 41, 000 - ------ - & 32, 000 - ------ - (4) & Intangible Assets: Goodwill & 8, 000 - ---- - & 10, 000 - ------ - (5) & Rate of interest on Investments is 10 % p . a . \end{matrix}$

Additional Information:
1. Debentures were issued on 31.3.2017
2. Investments were made on 31.3.2017

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