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Q1 Liabilities Amount Assests Amount Balance Sheet: CA 225000 CL CA-135000 90000

The balance sheet shows total assets of Rs. 3,60,000 consisting of fixed assets of Rs. 1,35,000 and current assets of Rs. 2,25,000. Total liabilities are also Rs. 3,60,000 consisting of equity share capital of Rs. 1,20,000, preference share capital of Rs. 60,000, reserves of Rs. 90,000 and current liabilities of Rs. 90,000. A series of calculations are shown to validate the balance sheet figures.

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Rajarshi Daharwal
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90 views2 pages

Q1 Liabilities Amount Assests Amount Balance Sheet: CA 225000 CL CA-135000 90000

The balance sheet shows total assets of Rs. 3,60,000 consisting of fixed assets of Rs. 1,35,000 and current assets of Rs. 2,25,000. Total liabilities are also Rs. 3,60,000 consisting of equity share capital of Rs. 1,20,000, preference share capital of Rs. 60,000, reserves of Rs. 90,000 and current liabilities of Rs. 90,000. A series of calculations are shown to validate the balance sheet figures.

Uploaded by

Rajarshi Daharwal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Q1

Balance Sheet
Liabilities Amount Assests Amount
Equity Share 1,20,000 Fixed Assets 1,35,000
Preference Share 60,000
Reserve 90,000
Current Liability Current Assets
Bank O/D 30,000 Other Current Asset 90,000
Other Current Liability 60,000 Stock 1,35,000
Total 3,60,000 Total 3,60,000

Working Capital (WC)= Current Asset (CA)- Current Liability (CL)


CL=CA-135000

Current Ratio (CR)= CA/CL


2.5=CA/(CA-135000)
CA=225000
CL=CA-135000= 90000

Liquid Ration (LR)= (CA-Stock)/(CL-Bank O/D)


1.5=(225000-Stock)/(90000-30000)
Stock=135000

Proprietary Ratio (PR)= Proprietary Fund (PF)/Total Assets (TA)

PF= Equity Share Capital + Preference Share Capital+ Reserves

In other way we can say PF= FA+CA-Longterm Liability- Current Liability & Total Assets = FA+CA

PR=PF/TA
PR= (FA+CA-CL)/(FA+CA)
0.75=(FA+225000-90000)/(FA+225000)
FA= 135000

PF=FA+CA-Long Term Liab-CL


PF=135000+225000-90000
PF=270000

PF= Equity Share Capital (2X) + Preference Share Capital (X)+ Reserves
270000= 2X+X+90000
X=180000/3=60000

Equity Share Capital (2X) = 120000


Preference Share Capital (X) = 60000

You can Cross Check


1) Working Capital = 225000-90000= 135000
2)Current Ratio=225000/90000=2.5
3) Liquid Ratio = (225000-135000)/(90000-30000)=1.5
4) Proprietary Ratio = (120000+60000+90000)/(135000+225000)=0.75
Q,2
Cash Flow Statement
Particular Amount
Operating Activity
Net Profit 40
Less Increase in Current Assest -400
Less Decrease in Current Liabilities -90
Cash Flow From Operating Activity -450
Investment Activity
Purchase of Machinery -200
Purchase of Building -200
Purchase of Investment -100
Cash Flow From Investment Activity -500
Financing Activity
Term Loan Raised 200
Issue of Equity Shares 200
Issue of Debenture 150
Cash Flow From Financing Activity 550

Opening Cash Balance 200


Cash Flow From Operating Activity -450
Cash Flow From Investment Activity -500
Cash Flow From Financing Activity 550
Closing Cash Balance -200

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