Question

Oxford Ltd. was in the business of manufacturing Motorbikes. It decided to provide hearing aids and tricycles free of cost to physically challanged people. Following information is related to Oxford Ltd.

$\begin{array}{ccc}\text{Particulars}& \mathrm{31.03.2017}& \mathrm{31.03.2016}\\ & \text{Rs.}& \text{Rs.}\\ \text{Equity Share Capital}& 16.00& 16.00\\ \text{Preference Share Capital}& 2.00& 2.00\\ \text{Reserves and Surplus}& 5.40& 4.00\\ \text{Non - Current Liabilities}& 14.40& 14.00\\ \text{Current Liabilities}& 7.20& 4.00\\ \text{Non-Current Assets}& 30.60& 28.00\\ \text{Current Assets}& 14.40& 12.00\end{array}$

You are required to :

(a) Prepare a Common Size Balance Sheet, and

(b) Identify the value involved.

Answer 1

$\text{OXFORD LTD}$
$\text{COMMON SIZE BALANCE SHEET}$
$\text{as at 31.3.2016 and 31.3.2017}\text{(Rs. in Lakhs)}$
$$\begin{array}{cccccc}\text{Particulars}& \text{Note}& \text{Absolute}& \text{Amounts}& \text{Percentage of}& \text{Balance Sheet Total}\\ & \text{No.}& 2016& 2017& 2016& 2017\\ & & \text{Rs}.& \text{Rs}.& \%& \%\\ \text{I. EQUITY AND LIABIITIES:}& & & & & \\ \text{(1) Shareholder's Funds}& & & & & \\ \text{(a) Share Capital}& \text{1}& 18.00& 18.00& {45}^{\left(i\right)}& {40}^{\left(iv\right)}\\ \text{(b) Reserves and Surplus}& & 4.00& 5.40& {10}^{\left(ii\right)}& {12}^{\left(v\right)}\\ \text{(2) Non - Current Liabilities}& & 14.00& 14.40& {35}^{\left(iii\right)}& {32}^{\left(vi\right)}\\ \text{(3) Current Liabilities}& & 4.00& 7.20& 10& 16\\ & & \overline{\underset{–}{40.00}}& \overline{\underset{–}{45.00}}& \overline{\underset{–}{100}}& \overline{\underset{–}{100}}\\ \text{II. ASSETS:}& & & & & \\ \text{(1) Non - Current Assets}& & 28.00& 30.60& 70& 68\\ \text{(2) Current Assets}& & 12.00& 14.40& 30& 32\\ & & \overline{\underset{–}{40.00}}& \overline{\underset{–}{45.00}}& \overline{\underset{–}{100}}& \overline{\underset{–}{100}}\end{array}$$


Working Note :
(1)
$\begin{array}{ccc}& & \\ \text{Share Capital}& 2016& 2017\\ \text{Equity Share Capital}& 16.00& 16.00\\ \text{Preference share capital}& 2.00& 2.00\\ & \overline{\underset{–}{18.00}}& \overline{\underset{–}{18.00}}\end{array}$

(2) All percentages will be calculated on the basis of total of Balance Sheet.
Hence, in 2016 percentage will be based on Rs.40 Lakhs
in 2017 percentages will be based on Rs.45 Lakhs.
Thus. (i) $\frac{18}{40}\times 100=45\%$

(ii) $\frac{4}{40}\times 100=10\%$

(iii) $\frac{14}{40}\times 100=35\%$

(iv) $\frac{18}{45}\times 100=40\%$

(v) $\frac{5.40}{45}\times 100=12\%$

(vi) $\frac{14.40}{45}\times 100=32\%$

(b) Value involved : Discharging Social Responsibility : By providing hearing aids and tricycles to specially abled people.