RATIO ANALYSIS

Q-1)
Average Stock = 80,000 Opening stock is 10,000 less than Closing stock
Average Stock = Closing Stock + Opening Stock i.e. 80,000 = Closing Stock + Opening Stock /2
‘Let Opening Stock be X’ So, Closing Stock = X + 10,000 i.e. 80,000 = X + 10,000 + X /2 80,000 =
2X + 10,000/2 1,60,000 = 2X + 10,000 2X = 1,50,000 X = 1,50,000/2 = 75,000
Opening Stock = 75,000
Q -2)
Gross Profit Ration on Sales = 30% Total G.P = 2,70,000 Cash Sales = 3,50,000 Average Debtors =
1,10,000
Net Sales = Gross Profit/30*100 Net Sales = 2,70,000/30*100 Net Sales = 9,00,000
Total Sales = Cash Sales + Credit Sales 9,00,000 = 3,50,000 + Credit Sales Credit Sales = 9,00,000 –
3,50,000 = 5,50,000
Debtors Turnover Ratio = Net Annual Credit Sales/ Average Debtors = 5,50,000/1,10,000
= 5 Times
Q-3)
Total Current Assets = 3,00,000 Current Ration = 2.5:1 Capital = Fixed Assets + Working Capital
100% = 64% + 36%
Current Ratio = Current Assets/Current Liabilities 2.5:1 = 3,00,000/ Current Liabilities
3,00,000 = 2.5 Current Liabilities Current Liabilities = 3,00,000/2.5 = 1,20,000
Working Capital = Current Assets – Current Liability = 3,00,000 – 1,20,000 = 1,80,000 i.e. 36% =
1,80,000 100% i.e. Capital = 100*1,80,000/36 = 5,00,000 Fixed Assets = 64% of Capital
5,00,000*64/100 = 3,20,000
Capital = 5,00,000 Fixed Assets = 3,20,000

Q.4 Current ratio is 3.75; Acid test ratio is 1.25, Stock Rs 3,75,000. Calculate Net
Working Capital.

Sol:- C R = 3.75
A T R = 1.25
Stock = 3, 75,000
N W C =?
C R – A T R = STOCK
3.75 – 1.25 = 375000
2.50 = 375000
FOR 2.50 375000
3.75 ?
 C A = 562500

CR=CA/CL

3.75 = 562500 / C L
C L = 150000

NWC=CA–CL
N W C = 562000 – 150000

N W C = 4,12,500

Q 5 A Trade carries an average stock of Rs 40000. His stock turnover ratio is 8

times. If he sells goods at a profit of 20% on sales. Find out his profit.

Sol: Avg Stock = Rs 40000

S T O R = 8 times
Profit = 20% on sales
Profit = ?
Avg stock = O/p stock + C/l stock
2
S T O R = C O G S / Avg Stock
C O G S = 8 × 40000
C O G S = 320000
Therefore
C O G S + PROFIT = SALES
 80% + 20% = 100%
80% 320000
20% ?
PROFIT = 80000 Rs.

Q 6 From the following information, Calculate the Average Collection Period;Total

Sales – Rs 100000. Cash sales included in total sales Rs 20000. Sales Returns – Rs
7000. Total debtors @ the end of the year Rs 10000. Bills receivable – Rs 4000.
Bad debts provision Rs 1000 and Creditors – Rs 10000.

Sol : Given T S = 100000 rs

C S in T S = 20000 rs
S R = 70000 rs
T D = 10000 rs
B R = 4000 rs
B D = 1000 rs
S Cr = 10000 rs
ACP=?
A C P = Avg Drs / Net Cr Sales
Net Cr Sales = Gross Sales 100000
 (-) Sales Returns 7000
93000
(-) Cash sales 20000
Net Cr Sales 73000
Avg Drs = S Drs 10000
(-) Rec from B D 1000
9000
(+) Bills rec. 4000
Avg. Drs 13000
A C P = 13000 / 73000 × 365
A C P = 65 days

Solution 7

Debtors turnover ratio = Net and Sales / Average debtors

Gross Profit Ratio = Gross Profit/ Net Sales x 100

20 = (1, 00,000 / Net Sales) x 100

Net Sales= (1, 00,000 / 20) x 100 = 5, 00,000

Credit Sales = Total Sales – credit Sales

= 5, 00,000 – 1, 20,000

= 3, 80,000

Debtors turnover ratio = 3, 80,000 / 95, 000 = 4 times

Solution 8

Current Ratio = 45, Quick assets = 3, Invest = 60,000, Current Assets? Current Liabilities?
 Current Assets– Quick assets= Inventory

4.5 – 3 = 60,000

1.5 = 60,000

Current Assets for 1.5 = (60,000 x 4.5)/ 1.5 = 1,80,000

Current Ratio = Current Assets / Current Liabilities

4.5 = 1,80,000 / Current Liabilities

Current Liabilities= 1,80,000 / 4.5 = 40,000

Current Assets = 1,80,000 and Current Liabilities = 40,000

Solution 9

Current Ratio = 3 %Working Capital =2,00,000

Working Capital = Current Assets– Current Liabilities

Working Capital = 3 – 1 = 2

For 2  2,00,000

For 3  ?

Current Assets = (3 x 2,00,000) / 2 = 3,00,000

Current Assets – Investment = Quick assets

Quick assets = 3,00,000 – 2,20,000

Quick assets = 80,000

10. Given, opening stock= 29000

Purchases=242000

Sales= 320000

GP=25%on sales
 GPR = GP *100

Sales

25= GP *100

320000

GP = 80000

COGS = sales – GP

= 320000-80000

= 240000

Opening stock + purchases - closing stock = COGS

29000 + 242000 – closing stock = 240000

Closing stock = 31000

Average stock = opening stock +closing stock

= (29000+31000)/2

= 30000

STOR = COGS/ average stock

= 240000/30000

= 8 times

11. Given, Cr.sales =540000,

Dr. = 90000

Average collection period = A.Dr *360

 Net credit sales

= 90000 *360

540000

=60 days

12. Given, Cr.sales = 150000,

Cash sales= 250000,

Opening stock = 25000,

Return inwards= 25000,

Closing stock = 35000,

GPR = 20%

Cr.sales + Cash sales –return inwards =NS

150000 + 250000 – 25000 = NS

Ns = 375000

GPR = GP *100

NS

25 = GP *100

375000

GP = 75000

Average stock = opening stock +closing stock

= 25000+35000
 2

= 30000

COGS = NS- GP

= 375000-75000

= 300000

STOR = COGS

Average stock

= 300000

30000

= 10times

Inventory conversion for year = 365

ITOR

= 365

10

= 37 days.

Solution 13:

Credit turnover ratio=? Average payment piriod=?

Net credit purchases = total purchases-cash purchases - purchase returns

=4,00,000 - 50,000 - 20,000

=3,30,000.

Average creditors =closing balance + bills payable at the end

=60,000+20,000
 =80,000.

Credit turnover ratio = net credit purchases

Average creditors

=3,30,000

80,000

=4.12times.

Average payment period= 365

Credit turnover ratio

=365

4.12

=89days.

Solution 14:

Given- average stock=40,000 opening stock=5,000 less then closing stock

opening stock=?

Let opening stock be X - 5,000

closing stock be X

average stock= opening stock+closing stock

40,000 x 2=[X-5,000]+X

80,000+5,000=2X

X=85,000

X=42,500.

Therefor,closing stock=42,500
Opening stock=42,500-5,000=37,500.

Solution 15-

Given- gross profit ratio-20% pross profit-100,000 cash sales-1,20,000

average debtors-95,000 debtors turnover ratio-?

Debtors turn over ratio= Net credit sales

Average debtors

Gross profit ratio= gross profit

Net sales

20= 1,00,000 x100

Net sales

Net sales=total sales-cash sales

= 5,00,000 – 1,20,000

=3,80,000

Debtors turnover ratio=3,80,000

95,000

=4 times.

Question 16.
Solution:-
Turnover of fixed assets ratio is= 1:1.5
TOFA= COGS
NFA
1 = 50000
1.5 NFA
NFA=75000

QUESTION 17

SOLIUTION:

CR=2.5; LR=1.5; WC=50000

CR=CA=2.5
CL 1
NWC=CA-CL
=2.5-1
NWC =1.5
1.5 50000
2.5 ?
= 50000*2.5
1.5
CA= 83333
CA-CL= INVENTORY
CR=CA
CL
2.5=83333
CL
CL=83333
2.5
CL=33,333
LR=QA
CL
1.5=QA
33,333
QA=49999=50,000
IN=CA-QA
=83,333-50,000
=33,333

QUESTION 18.
SOLLUTION
CR =4.5; ATR =3; INVENTORY=24000
CR-QR=INVENTORY
4.5-3=24000
1.5=24000
1.5 24000
4.5 ?
4.5*24000
1.5
CA=72000
CR=CA
CL
4.5=72000
CL
CL=72000
4.5
CL=16000

Question no.19
Given:

Current ratio=4.5, Inventory=24000, Quick ratio=3

Solution:

Current ratio-Quick ratio=Inventory

4.5-3=24,000

1.5=24,000

4.5 How much

Current assets=24,000*4.5/1.5

=72,000
Current ratio= Current asset/current liability

4.5=72,000/current liability

=16000

Current liability =16,000

Question no 20:
Given:

Gross profit 20%on sale, Cost of goods sold=300000

Solution:

Cost of goods sold + Gross profit=Sales

80%+20%=100%

80% is 300000

20% is how much

Gross profit = 3,00,000*20/80

Gross profit =75,000

Sales =3, 00,000+75,000=3,75,000

Sales =3, 75,000

Question no 21:
Given:

Gross profit =3, 20,000, Opening expenses=1,00,000, Tax=20,000, Owners

fund=300000

Solution:

Gross profit 3,20,000

- Opening expenses 1,00,000
Earnings before tax 2,20,000
- Tax 20,000
Earnings after tax 2,00,000

Return on profit = Earnings after tax/Owners fund

2, 00,000/3, 00,000*100= 40%

Return on profit =40%

PROBLEM #22

SOLUTION:

1. Dividend yield on equity share

DYS = div/Eq.Share
Market price of Eq.Share
=Dividend/Equity Share
 =10*0.20
=2 Rs

2. Cover for the preference dividend

CPD= PAT
Preference Dividend
=2,70,000
27,000
=10 times.

3. Cover for equity dividend

= PAT(-) preference dividend
Equity dividend
= 2,70,000-27,000
1,60,000
=Cover for Eq. Dividend
= 1.51 times.

4. Earning Per Share

EPS=earnings available for equity share holders
No. of Equity Shares.
=2,70,000-27,000
80,000
EPS=Rs 3.04 Per Share

5. Price Earning Ratio

PER=Market price/share
EPS
= 40
3.04
=13.15 Times.

6. Net Cash Flow

=(PAT+ Depreciation)-Eq. Dividend-Preference. Dividend
=(27,000+60,000)-16,000-27,000
 Net Cash Flow = 1,43,000

23. The following financial statement of X Ltd. Are supplied to you:

Trading and Profit & Loss Account for the year ended 31st March 2003

Particulars Amount Particulars Amount

To Opening Stock 99,500 By Sales 8,50,000
To purchases 5,42,250 1,49,000
To Wages 14,250
To Gross profit 3,40,000
9,99,000 9,99,000
By Gross
To Selling & Distribution 30,000 Profit 3,40,000
To Administration Expenses 1,50,000 By Dividend 3,000
By
To General Expenses 15,000 Commission 6,000
To Loss on sale of Asset 4,000
To Net Profit C/D 1,50,000
3,49,000 3,49,000

Balance Sheet for the year ended as on 31st March 2003

Liabilities Amount Assets Amount

Equity Share Capital 2,00,000 Land & Building 1,50,000
Plant &
Reserves & Surplus 90,000 Machinery 80,000
Sundry Creditors 90,000 Stock 1,49,000
Bills Payable 40,000 Debtors 71,000
Profit & Loss A/c 60,000 Bank Balance 30,000
4,80,000 4,80,000

Calculate Different possible Ratios.

Solution:

A) Liquidity Ratios

CR=CA/CL, CA=Stock+Dr+Bank
=149+71+30
=2, 50,000.
 = 2, 50,000/1, 30,000.
CR=1.9:1
QR=QR/CR CL=BP+S.Dr
=1, 01,000/1, 30,000 =40+90
=0.77:1 =1, 30,000.
QA=CA-Stock
=250-149
=1, 01,000
ALR=Cash & Cash Eq/CL
=30,000/1, 30,000
=0.23:1
I to Wcc=Inv/NWC NWC=CA-CL
=1, 49,000/1, 20,000 =250-130
=120
=1.24:1
B) Stability Ratios
i) Debt Equity Ratio=Debt/Equity
=Not Possible
ii)Debt Capital Ratio=LTB/LTD+Eq
=Not possible
iii)NWC=NW/TA NW=Eq+R/S+P&L A/c
=3, 50,000/4, 80,000 =200+90+60
=0.72:1 =3, 50,000
IV) FA to NWR = NFA/NW FA=L&B+P&M
=2, 30,000/3, 50,000 =150+80
=0.65:1 =2, 30,000
V) CA to NWR =NCA/NW
=2, 30,000/3, 50,000
=0.71:1.
Vi) NWC to NWR=1, 20,000/3, 50,000
=0.34:1.
vii) Solvency Ratio= TA/TL
=4, 80,000/1, 30,000.
=0.39:1.
viii) Capital Empl Ratio=NFA/Capital Exp
=2, 30,000/3, 50,000
=0.65:1
ix)Capital gearing Ratio=Fixed interest bearing of security+Fixed dividend by bearing
stock/Eq.shareholder Fund/NW
=Not possible
C) Coverage Ratios
i) Interest coverage ratio = EBIT/Interest
 =Not possible.
ii)Debt Service coverage Ratio=EBIT/Interest+Principle Repayable/(1-Tax).
=Not Possible.
iii)Overall Dividend ratio=PAT/Eq & Pref Dividend
=NP
iv)Pref Dividend coverage ratio=PAT/Pref Dividend
=Not possible.
V) Eq. Dividend coverage ratio=PAT-Pref. Dividend/Eq. Dividend
=Not possible.
D) Turnover Ratios or Activity Ratios
I) Capital Employed TOR=Net sales/Avg Capital Employed
=8, 50,000/3, 50,000
=2.42 times.
Ii) Fixed Assets TOR= Net sales/FA
=8, 50,000/2, 30,000.
=3.69 times
Iii) CATOR=8, 50,000/2, 50,000
=3.4 times.
iv) Working Captl, TOR = 8, 50,000/1, 20,000
=7.08 times.
V) Total Assets, TOR=Net sales/Total Assets
=8, 50,000/4, 80,000
=1.77 times.
vi) Stock, TOR=COGS/Avg.Stock
COGS=NS-GP
=8, 50,000-3, 40,000
=5, 10,000.
Avg.Stock=open+cls/2.
=99,500+1,49,000/2
=1,24,250
=5,10,000/1,24,250.
=4.10 times.
vii)Dr,TOC=Net Crdt Sales/Avg. Dr
=8,50,000/71,000
=11.9 times
Viii) Debt Collection period=360/DTOR
=360/11.9
=30.25
=App 30 days.
Ix)Cr’s, TOR=Net Cr pure/Avg Cr
=5, 42,250/1, 30,000 Avg Crdt=BP+S
=4.17 times =40+90
DEBT Payment Period/ Avg PP
x)DPP=360/CTOR
=360/4.17
=86 days
=App 3 months
xi) Cash TOR= Net sales/Cash & Cash Equiv
=8, 50,000/30,000.
=28.33.
E) Profitability Ratios
I) GPR=GP/NS*100
=3, 40,000/8, 50,000*100.
=40%
Ii) NPR=NP/NSx100
=1, 50,000/8, 50,000*100
=17.64%
iii)P. Ratio=op.cost/NS*100
=COGS+S&D+Admin exp+G.Exp/NS*100
=5, 10,000+30,000+1, 50,000+15,000/8, 50,000*100
=7, 05,000/8, 50,000*100
=82.94%
IV) Operating Profit Ratio=100-op.cost
=100-82.94
=17.06%
v)Return on capital employed Ratio=Op.Profit/Capital Employed*100
=1, 45,000/4, 50,000*100. [Tot sales- open sales
=41.42% =8,50,000-7,05,000
=1,45,000.
vi) Return on Total Assets= Open.Profit/TA*100
=1, 45,000/4, 80,000*100
=30.20%
vii) EPS=Earnings available+Eq Share Holders/No of Eq.Shares
=1, 50,000/20,000
=Rs.7.5/Share
Viii)PE Ratio=Market price/Shares/EPS.
=Not possible.
ix) Dividend yield Ratio=Dividend/share/Market price/Share.
=Not Possible.
QUESTION NUMBER 24

Stock turnover ratio = COGS

Average stock

Average stock = opening stock + closing stock

10000 + 15000/2 = 12500

Stock turnover ratio = 50000

12500

Stock turnover ratio = 4 times

Debtors turnover ratio = Net credit sales

Average Debtors

= 10000

12500

Debtors turnover ratio = 8 times

Creditors turnover Ratio = Net Credit purchases

Average creditors

= 40000

40000

Creditors turnover Ratio = 1 time

Sales to Working Capital Ratio = Net sales

NWC
NWC = CA – CL

CA = stock + debtors +B/R + cash

15000 + 15000 +12500 + 17500 = 60000

CL = creditors + B/P = 40000

NWC = 60000 – 40000 = 20000

= 100000

20000

= Sales to Working Capital Ratio = 5 times

Sales to Net fixed assets Ratio = Net sales

NFA

NFA = L&B + P&M + F&F

= 100000

Sales to Net fixed assets Ratio = 100000

100000

Sales to Net fixed assets Ratio = 1 time

Sales to capital employed Ratio = Net sales

Average cap employed

Average capital employed = equity + P/L A/C

= 100000 + 20000 = 120000

Sales to capital employed Ratio = 100000

120000

Sales to capital employed Ratio = 0.83:1

Return on shareholders’ investment = Profit after taxes X 100

Share holders fund

= 20000 X 100

120000

Return on shareholders’ investment = 16.67%

Current ratio = Current assets

Current liabilities

= 60000

40000

Current ratio = 1.12:1

Acid test ratio = Quick assets

CL

Quick assets = currents assets – stock

= 60000 – 40000 = 20000

Acid test ratio = 40000

20000

Acid test ratio = 1.12:1

Gross profit Ratio = Gross profit X 100

Net sales

= 50000 X 100

100000

Gross profit Ratio = 50%

Net profit Ratio = Net profit X 100

Net sales

= 20000 X 100

100000

Net profit Ratio = 20%

Operating ratio = COGS + admin expenses + S&D expenses X 100

Net sales

= 50000 + 15000 + 1200 X 100

100000

Operating ratio = 77%

PROBLEM NO.25

1. Current Ratio:
C.R= C.A/C.L
Where,
C.A= Stock + Bills Receivable + Debtors + Bank + Readily Marketable Security

=60,000 + 30,000 + 1,50,000 + 2,00,000 + 20,000

= 1,00,000 Rs/-

C.L= Bills Payable + Sundry Crs. + Bank Over Draft + Provision For Tax.

=1,24,000 + 80,000 + 20,000 + 1,76,000

 = 4,00,000 Rs/-

There for, C.R=10,00,000/4,00,000

=2.5:1 Times

2. Quick Ratio:

Q.R=Q.A/C.L

Where,

Q.A=C.A-Stock

=10,00,000-6,00,000

=4,00,000 Rs/-
C.L=C.L- BOD

=4,00,000-20,000

=3,80,000 Rs/-

Q.R=1.50: 1 Times

3. Absolute Liquidity Ratio:

A.L.R=Cash & Cash Equ./C.L

Where,

Cash & Cash Equ = Bank + Readily Marketable Security

= 2,00,000 + 20,000

= 2,20,000 Rs/-

A.L.R=2,20,000/4,00,000

=0.5:1 Times

4. Ratio of Inventory to Working Capital:

 R.I.W.C=Inventory/Net Working Capital

N.W.C= C.A-C.L

=10,00,000-4,00,000

=60,000 Rs/-

R.I.W.C=1:1 Times

5. Ratio of C.A to F.A:

R.C.A to F.A=C.A/Net F.A

Where,

Net F.A=Good Will + Plant & Machinery + Land & Building + Furniture

=5,00,000 + 6,00,000 + 7,00,000 + 1,00,000

=19,00,000

R.C.A to F.A=10,00,000/19,00,000

=0.5:1 Times

6. Debt Equity Ratio:

Debt Equity Ratio=Debt/ Equity

Debt=12% Debentures=8,00,000

Where, Equity= Equity Capital + Preference Capital + General Reserve + P & M

=10,00,000 + 5,00,000 + 1,00,000 + 4,00,000

=20,00,000 Rs/-

There for, Debt Equity Ratio=8,00,000/20,00,000

=0.4:1 Times

7. Proprietary Ratio:
 Proprietary Ratio=Proprietary Fund/Total Assets

Where, Proprietary Fund= Equity Fund

= 20,00,000

There for, Proprietary Ratio=20,00,000/29,00,000

=0.69:1 Times

8. Capital Gearing Ratio:

Capital Gearing Ratio=(FIGS+FDGS)/Equity Share Holders Fund

Where, Equity Share Holders Fund=Equity + General Reserve + Profit & lose

=10,00,000 + 1,00,000 + 4,00,000

=15,00,000 Rs/-

There For, Capital Gearing Ratio=(8,00,000+5,00,000)/15,00,000

= 0.87:1 Times

9. Fixed Assets Ratio:

Fixed Assets Ratio=Net Fixed Assets/Capital Employed

Where, Cap Employed= Share Holders Fund + Debt

= 20,00,000 + 8,00,000

= 28,00,000 Rs/-

There for, Fixed Assets Ratio=1,90,000/28,00,000

=0.67:1 Times

QUESTION NUMBER 26
Proprietary ratio = Proprietors fund /net worth

Total assets

Net worth = Equity capital + 9% preference shares + reserve fund + P/L A/c + share premium -
preliminary expenses - discount on issue of debentures

= 300000 + 150000 + 50000 + 20000 + 10000 – 2000 – 1000

= 527000/-

Total assets = Assets – preliminary expenses – discount on issue of debentures – depreciation fund

= 94000 – 2000 – 1000 – 50000

= 887000/-

Proprietary Ratio = 527000

887000

= Proprietary Ratio = 0.59: 1

Debt Equity Ratio = Debt

Equity

Debt = 8% debenture + 6% mortgage loan

= 200000 + 60000 = 260000

Equity = 527000

Debt Equity Ratio = 260000

527000

Debt Equity Ratio = 0.42:1

Funded Debt to Capitalization Ratio = Debt

(Debt + equity)

= 260000
(260000+527000)

Funded Debt to Capitalization Ratio = 0.33:1

Fixed assets to Net worth ratio = Fixed assets

Net worth

Fixed assets = G/W + L&B + P&M + equipment + F&F - depreciation fund

90000 + 100000 + 250000 + 60000 + 80000 – 50000 = 530000

Fixed assets to Net worth ratio = 530000

527000

Fixed assets to Net worth ratio = 1.005:1

Solvency Ratio = Total assets

Total liabilities

Total liabilities= 8% debentures + 6% mortgage loan + creditors + provision for tax

= 200000 + 60000 + 80000 + 20000 = 360000

Solvency Ratio = 887000

360000

Solvency Ratio = 2.46:1

Current Assets to Proprietors fund Ratio = Current assets

Proprietors’ fund

Current assets = debtors + B/R + stock + cash + prepaid insurance

= 90000 + 100000 + 120000 + 45500 + 1500 = 357000

Current Assets to Proprietors fund Ratio = 357000

527000

Current Assets to Proprietors fund Ratio = 0.67:1

Fixed assets Ratio = Net fixed assets

Capital employed

Capital employed = proprietors fund + borrowed fund

= 527000 + 260000 = 787000

Fixed assets Ratio= 530000

787000

Fixed assets Ratio = 0.67:1

27. 1) C.R=CA/CL=194000/50000=3.88:1

CA = inventory + avg dr’s + st inventory+cash

=100+ [4+60/2]+24000+20000=194000

CL=b/p +tax pay

= 30+20 = 50000

2) acid test ratio = QA/CL = 94000/50000 = 1.88:1

QA= CA – investment =194-100 = 94000

3) dr’s t/o ratio = net cr’s sales/avg dr’s = 240000/50000= 4.89 times

Avg dr’s = 40000+6000/2 = 50000

4) debts collect period = 360/4.8 = 75 days

5) investment t/o ratio = cogs/AS = 100000/90000 = 1.1:1

COGS = sales – GP = 240 – 140 = 100

AS = opening stock + closing stock/ 2 = 80000 + 100000 / 2 = 90000

6) no of times interest earned = EBIT / interest

 = 70000 / 4200 = 16.67 times.

EBIT = 70000

Interest = 4200

7) EPS = ESH / no of e-shares = 34800 /5000 = 6.96/shares

EASH = PAT – propos divident = 36000 – 1200 = 34800.

8) rate of return on E-shares equation = PAT / S.H.funds

= 36000 /114000*100 = 31.57 %

S.H.funds = equty + P-shares + p&l a/c

= 50000 + 20000 + 44000 = 114000

9) Rate of total assets = PAT + int / T A * 100 = 36000 + 4200 / 244000 * 100

= 16.47

10) total debt to s-equty = debt / equty = 80000 / 114000 = 0.7:1

PROBLEM NO. 28

Given CR=2.5

NWC=CA-CL.

Therefore NWC=2.5-1

=1.5

1.5 ->60000

2.5 ->?

Therefore CA=100000

WORKING NOTE 2

Computation of CL
CR=CA/CL

2.5=100000/CL

Therefore CL=40000

WORKING NOTE 3

Computation of other CL

OTHER CL= CL-BOD

=40000-10000

=30000

WORKING NOTE 4

Computation of stock

Quick ratio=1.5

QR=QA/CL

1.5=QA/40

QA=60000

STOCK=CA-QA

=100000-60000, =40000

WORKING NOTE 5

Computation of Net FA’S.

Given propritory ratio= FA to PF

Is,0.75ie, 1-0.75=0.25

0.25 blocked in working capital

0.25->60000

0.75->?

=180000

WORKING NOTE 6
CAPITAL+CL=FA+CA

CAPITAL+40000=180000+10000

CAPITAL=240000

WORKING NOTE 7

Computation of equity capital

Capital=equity + R&S

240000=EQUITY+40000

EQUITY=200000

STATEMENT OF PROPRITORY FUND

A) SOURCE OF FUNDS AMT AMT

EQUITY CAPITAL 200000
R&S 40000
TOTAL SOURCE 240000
B) EMPLOYMENT OF FUNDS
Net FA’S 180000
NWC 40000
OTHER CA’S 60000
LESS, CL;OD (10000)
OCL (30000)
TOTAL FUNDS 240000

29) Working capital of a company is RS. 1,35,000 and current ratio is 2.5, Liquid ratio is 1.5 and the
proprietary ratio is 0.75.Bank overdraft is RS. 30,000. There is no long term loans and fictitious assets,
reserves and surplus amounted to RS. 90,000 and the gearing ratio is (equity capital to preference
capital) is 2

From the above information compute:

(1) Current assets(2) Current liabilities (3) Net block (4) Proprietors fund

(5) Quick liabilities (6) Quick assets (7) Stock (8) Preference capital & equity capital and draw the
statement of proprietors fund
=> Working note-1

Given current ratio is 2.5

As we know

NWC=CURRENT ASSETS-CURRENT LIABILITIES

135000=2.5-1

1.5-135000(NWC)

2.5(A) =?

135000̽*2.5/1.5

CURRENT ASSETS =2,25,000

2) CURRENT LIABILITIES

CR=CA/CL

2.5=2,25,000/CL

CL=2,25,000/2.5

CL=90,000

3) QUICK LIABILITIES

QL=CL-BANK OVERDRAFT

=90,000-30,000

=60,000

4) QUICK ASSETS

QR=QA/CL

1.5=QA/90,000

QA=90,000*1.5

QA=1,35,000

5) STOCK

STOCK=CURRENT ASSETS-CURRENT LIABILITIES

 =2,25,000-1,35,000

=90,000

6) NET BLOCK

0.75 OR 75% of proprietor funds is blocked on fixed assets that is balance 1-0.5=0.75=0.25

Employed net working capital

0.25=1,35,000

0.75=?

NET BLOCK=4,05,000

By applying account equation

Capita l+ liabilities=assets

Capital + long term liabilities + CL= FA + CA

CAPITAL + 0 +90,000 = 6,30,000

CAPITAL = 6,30,000-90,000

CAPITAL = 5,40,000

7) PREFERENCE & EQUITY FUND

CAPITAL= EQ + P.SHARE + RESERVE

5,40,000 = EQ + P.SHARE + 90,000

EQ + P.SHARE = 4,50,000

Given capital gearing ratio = EQ/P.SHARE =2/1

4,50,000/3*2/1 = 3,00,000 EQ

1,50,000 P.SHARE

8) PROPRIETOR FUND

PARTICULARS AMOUNT AMOUNT

OWNERS FUND
1) equity capital 3,00,000
2) p. share capital 1,50,000
3) reserves & surplus 90,000 5,40,000
CAPITAL EMPLOYED 5,40,000
EMPLOYMENT OF FUNDS
1)on fixed assets (net blocked) 4,05,000
2)networking capital
Current assets
inventory 90,000
Quick assets 1,35,000
- Current liabilities
bank o/d 30,000
other CL 60,000 1,35,000
EMPLOYMENT OF FUNDS 5,40,000

Question no: 30

Solution

Working note: 1

1. Computation of Networth

Given:

Sale to networth ratio: 2:1

Sale to networth=Net sale/Networth

2:5=160000/net worth

Networth=160000/2.5

Networth=640000

2. Computation of current liabilities

Given:

Current liabilities=42%
 Networth=640000*42/100

Current liabilities=268800

3. Computation of total liabilities to networth

Given:

Given=75%

Networth=640000*75/100

Total liabilities=480000

4. Computation of current asserts

Given:

Time ratio is 2.9

Current ratio=current asserts/current liabilities

Current ratio =current asserts/268800

Current assert=268800*2.9

Current assert=779500

5. Computation of closing inventory

Given:

Given=4.5 times

Sales to inventory=Net sale/Closing inventory

4.5=1600000/closing inventory

Closing inventory =1600000/4.5

Closing inventory=355556

6. Computation of average collection period

Given:

Given=64 days
 Avg collecti period=avg dr/net cr sale*365dy

64=avg dr/1600000*365

Avg dr =102400000/365

Avg dr =280548

7. Computation of cash

Given:

Current asserts =stock+dr+cash

779520= [355556+280548] +cash

Cash=143416

8. Computation of long term loan & liabilities

Given:

Total liabilities=long term loan + current liabilities

4800000=long term loan +268800

Long term loan=480000-268800

Long term loan=211200

9. Computation of fixed assets by acc eixedq

Given:

Networth+long term loan +current liabilities=fixed asserts+779500

Fixed asserts=1120000-779500

Fixed asserts=340480

Balance sheet

Balance sheet as on ………………..

Liabilities Amt Assets Amt

Share cap 640000 Assets

Fixed assets 340480

Long term loan 211200 Current asset

Cash 143416

Stock 355556

Current liabilities 268800 Debtor 280548

1120000 1120000

Liabilities Rs. Assets Rs.

Prob No. 31:

By Using the following ratios compute the Balance sheet:

Total Assets/ Net worth 3.5

Sales to Inventory 15

Sales/Fixed Assets 6

Sales/Debtors 18

Sales/Current assets 8

Current Ratio 2.5

Annual Sales Rs. 25,00,000

Net Worth ? Fixed Assets ?

Long term debt ? Inventory ?

Current liabilities ? Sundry Debtors ?

Liquid Assets (other) ?

? ?

Solution:
𝑆𝑎𝑙𝑒𝑠 6
(i) Given, 𝐹𝑖𝑥𝑒𝑑 𝑎𝑠𝑠𝑒𝑡𝑠
=1
2500000
 =6
𝐹𝐴
2500000
 𝐹𝐴 = 6
 𝐹𝐴 = 𝑅𝑠. 4,16,667

𝑆𝑎𝑙𝑒𝑠
(ii) Given, 𝐷𝑒𝑏𝑡𝑜𝑟𝑠 = 18
2500000
 = 18
𝐷𝑒𝑏𝑡𝑜𝑟𝑠
2500000
 𝐷𝑒𝑏𝑡𝑜𝑟𝑠 = 18
 𝐷𝑒𝑏𝑡𝑜𝑟𝑠 = 𝑅𝑠. 1,38,889

𝑆𝑎𝑙𝑒𝑠
(iii) Given, 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠 = 8
2500000
 =8
𝐶𝐴
2500000
 𝐶𝐴 = 8
 𝐶𝐴 = 𝑅𝑠. 3,12,500

(iv) Given, Current Ratio = 2.5

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠
 = 2.5
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
312500
 = 2.5
𝐶𝐿
312500
 𝐶𝐿 = 2.5
  𝐶𝐿 = 𝑅𝑠. 1,25,000

𝑆𝑎𝑙𝑒𝑠
(v) Given, 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 = 15
2500000
 = 15
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
2500000
 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 = 15
 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 = 𝑅𝑠. 1,66,667

(vi) We know, 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠 + 𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡𝑠

 Total Assets= 312500+ 416667
 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 = 𝑅𝑠. 7,29,167Total Assets= Rs. 7,29,167

𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
(vii) Given, = 3.5
𝑁𝑒𝑡 𝑤𝑜𝑟𝑡ℎ
729167
 = 3.5
𝑁𝑊
729167
 𝑁𝑊 = 3.5
 𝑁𝑒𝑡 𝑤𝑜𝑟𝑡ℎ = 𝑅𝑠. 2,08,333

(viii) We know, Current assets= Stock+ Debtors + Liquid assets

 312500= 166667 + 138889 + Liquid assets
 Other Liquid Assets= 312500 – 305556
 Other Liquid Assets= Rs. 6,499

(xi) We know, Liabilities = Assets

 Networth + Long term debt + Current liabilities = Fixed assets + Current assets
 208333 + Long Term Debt + 125000 = 416667 + 312500
 Long Term Debt = 729167 – 333333
 Long Term Debt = Rs. 3,95,834

Balance Sheet as on __/__/__

 Liabilities Rs. Assets Rs.

Net Worth 208333 Fixed Assets 416667

Long term debt 395834 Inventory 166667

Current liabilities 125000 Sundry Debtors 138889

Liquid Assets (other) 6944

729167 729167

32) Given:

GP=80,000

Sales-GP=COGS

Sales=80,000*4/1=3,20,000

(Credit) SalesCOGS=3,20,000*3/4

=2,40,000.

(Given)

GP=80,000

STR=COGS/Average Stock

10=2,40,000/Avg Stock

Average Stock=24,000.

*Compute Net Sales

GP=80,000(1/4of Sales)

GRP=GP/NS*100
¼=80,000/NS=32,000

*Credit Sales

Total Sales 3,20,000

(-)Cash 1/4th 80,000

Net Credit Sales 2,40,000

*COGS=NS-GP

=3,20,000-80,000=2,40,000.

*Computation of TA

TATR=4times

TOTR=NS/TA

TA=3,20,000/4=80,000

*Computation of LT Debt

(Given):Debt Equity=50%

Debt Equity=Debt /Equity

0.5/1=Debt//40,000

40,000*0.5=Debt

20,000=LtDebt

*Computation of CL

TA = Equity + LTD+CL

80,000=40,000+20,000+CL

CL=20,000

*Computation of CA CR=2:1

CR=CA/CL

2=CA/20,000

CA=40,000
*Computation of FA

TA=FA+CA

80,000=FA+40,000

FA=40,000

*Computation of Sundary Debtor

DCP=15 days

DCP=Average Debtor/NCS *360

15=Average Debtor/2,40,000*360

Average Debtor=3,60,000/360=10,000

*Cash on Sales=?

Total Current Asset=Debtor+Stock+Cash at Bank

40,000=10,000+24,000+Cash at Bank

Cash at Bank=6,000

Liabilities Amount Assets Amount

Share Capital 40,000 Fixed Asset 40,000
LTDebt 20,000 Average Stock 24,000
Current Liabilities 20,000 Average Debtor 10,000
Cash at Bank 6,000

Total 80,000 Total 80,000

Problem No : 33

Note 1:- Computation of Net Sales

𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡
Gross Profit Ratio = 𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠
× 100

2.5 = 80,000
N.S
N.S = 3,20,000
Note 2 :- Computation of Cost of Goods Sold
COGS = N.S – G.P
= 3,20,000 – 80,000
COGS = 2,40,000
Note 3 :- Computation of Sundry Debtor
Debtor Velocity = 3 month
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑑𝑒𝑏𝑡
Debit collection period = × 12
𝑁𝑒𝑡 𝑐𝑟𝑒𝑑𝑖𝑡 𝑠𝑎𝑙𝑒𝑠(𝑁𝐶𝑆)

3 = Avg. debtor × 12
3,20,000
 S.Dr = 80,000 – 5000
Note 4 :- Computation of Average Stock
𝐶𝑂𝐺𝑆
STOR =
𝐴𝑣𝑔.𝑆𝑡𝑜𝑐𝑘

8 = 2,40,000
Avg. stock
Avg. Stock = 30,000
Note 5:- Computation Of Closing Stock
Avg. Stock = Opening stock + Closing Stock
2
30,000 = x+x+2,000
2
60,000 = 2x+ 2,000
2x = 58,000
x = 29,000
Opening Stock = 29,000
Therefore closing stock = 29,000+ 2,000
Closing Stock = 31,000
Note 6 :- Computation Of Fixed Assests Turn Over Ratio
𝑁.𝑆
FATOR =
F.A

8 = 3,20,000
F.A
F.A = 40,000
Note 7 :- Computation of Total Assets
 T.A = F.A + C.A
= 40,000 + !,28,333
T.A = 1,68,333
Note 8:- Computation of Purchases
COGS = Opening Stock + purchase – Closing Stock
2,40,000 = 29,000 + purchases – 31,000
Purchases = 2,42,000

Note 9 :- Computation of Sundry creditors

𝐴𝑣𝑔 𝑐𝑟𝑒𝑑𝑖𝑡𝑜𝑟
Creditor velocity = × 12
𝐍𝐂𝐒

Avg. Cr = 4,76,000
12
Avg . Cr = 39,667
Creditors = Avg. cr + B.P
Sundry Creditor = 38,333
Note 10 :- Computation Of Capital and Equity
Total .Liabilities + Capital = Total . Assets
Capital + S. Cr + B.P = 40,000 + 1,28,333
Capital +38333 +2000 = 1,68,333
Capital = 1,28,000
We also know that : - capital = equity + reserves/surplus
1,28,000 = Eq + 28,000
Equity = 1,00,000
Statement Showing Proprietor’s Fund :-
Particulars Amt Amt

A) Capital Sources
1) Share. Fund
Eq. Capital 1,00,000
Reserves and Surplus 28,000
Owner’s Fund 1,28,000
B) Utilization Of Fund
1) Fixed Assets 40,000
2) On Net Working Capital
Current .Assets
Closing Stock 31,000
S.Dr 75,000
B.R 5,000
1,11,000
- Current Liabilities
S.Cr (38,000)
B.P (2,000) 70,667
1,28,000
34)
a) Given FA to capital =5/4

FA/capt = 10,00000/ capt

5/4=10,00000/capt

Capital =8,00000

b) Given net profit to capital=1/5

np/capital = np/800000

1/5 =np/800000

Np= 1,60000

c)Given np ratio =20 %

npr =np/ns*100

ns=8,00000

d) Given gp ratio = 25 %

gpr =gp/ns * 100

25% =gp/8,00000 *100

Gp=2,00000

e) Given fa to ca ratio is 5/4

FA/CA = 5/7
10,00000/ca = 5/7

CA=14,00000

f) Given stock turnover ratio is 10 times

STOR= COGS/AVG STOCK

COGS = Sales – GP

8,00000 – 2,00000

=6,00000

10 = 6,00000/Avg stock

AVG stock =60,000

Avg stock = OP stock +CL stock / 2

60,000 * 2 = OPstock +1,00000

OP stock =20,000

g) compn of TL

Given capital /TL = 5/7

8,00000/TL = 5/7

TL = 11,20000

PROBLEM NO 35
TRADING AND PROFIT&LOSS ACCOUNT AS ON 30-6-2004
 PARTICULARS AMOUNT PARTICULARS AMOUNT
To COGS a/c 6,00,000 By Sales a/c 20,00,000
To operating expenses(balancing fig) 11,90,000
To EBIT c/d 2,10,000
20,00,000 20,00,000
To Debenture Interest a/c 10,000 By EBIT b/d 2,10,000
To Income Tax a/c 1,00,000
To Net Profit 1,00,000
2,10,000 2,10,000

BALANCE SHEET AS ON 30/6/2004

PARTICULARS AMOUNT PARTICULARS AMOUNT
Net Worth 4,00,000 Fixed Assets(Balancing fig) 5,70,000
Share Capital 1,00,000 Cash 15,000
10% debentures 1,00,000 Stock 40,000
S.Creditors 60,000 Debtors 35,000
6,60,000 6,60,000

WORKING NOTE:
A] NET PROFIT TO SALES= 5%

NPR= (NET PROFIT/NET SALES)*100

5= (NET PROFIT/20,00,000)*100

NET PROFIT= 1,00,000

B] PROFIT BEFORE TAXES (PBT)

PAT 50% 1,00,000

TAX 50%  ?

TAX = 1,00,00 *50/ 100

TAX = 1,00,000

C] RETURN ON NET WORTH RATIO(RONW)= 20%

RONW=(PAT/NW)*100
 20 = (1,00,000/NW)*100

NET WORTH (NW) =6,00,000

D] SHARED CAPITAL TO RESERVES & SURPLUS = 4:1

NW = SHARED CAPITAL + RESERVES & SURPLUS

(5,00,000/5)*(4/1) = (4,00,000/1,00,000) = (SHARED CAPITAL/ RESERVES & SURPLUS)

E] 10% DEBENTURES

10%  10,000

100%  ?

DEBENTURE = 1,00,000

F] CURRENT RATIO = 1.5

CURRENT RATIO=( CURRENT ASSET/ CURRENT LIABILITY)

1.5 = (CURRENT ASSET / 60,000)

CURRENT ASSET = 90,000

G] INVENTORY TURNOVER RATIO(ITOR) =15TIMES

ITOR=(COGS/ AVERAGE STOCK)

15 =(6,00,000/AVERAGE STOCK)

AVERAGE STOCK =40,000

H] COMPUTATION OF CASH

CURRENT ASSET 90,000

(-) STOCK (40,000)
(-) DEBTORS (35,000)
CASH 15,000
Problem No. 36
Working Notes

1. Computation of various element of liabilities Side

Given

Share capital ration= 50% ------No change in Share Capital Position

i.e. 50%500000

P & L A/c 15%150000

Debenture 7% 100000

Sundry Creditor 25% 250000

2. Computation of Fixed Assets

Given

Fixed Asset to Total Asset = 60%

60
× 1000000
100

TFA = 600000

Plant & Machinery = 𝑇𝐹𝐴 − 𝐹𝑟𝑒𝑒 𝐻𝑜𝑙𝑑 𝑃𝑟𝑜𝑝𝑒𝑟𝑡𝑦

Plant & Machinery = 600000 − 400000

Plant & Machinery = 𝟐𝟎𝟎𝟎𝟎𝟎

Op. Balance of P&M 175000

Less: Depreciation 25000
150000
Add: Addition 50000
Closing Balance 20000
 3. Given

Ratio = 1.6:1
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
Current Ratio = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
1.6 =
250000

Current Assets = 400000

4. Given
𝑄𝑢𝑖𝑐𝑘 𝐴𝑠𝑠𝑒𝑡𝑠
Quick Ratio = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

𝑄𝑢𝑖𝑐𝑘 𝐴𝑠𝑠𝑒𝑡𝑠
1= 250000

Quick Assets = 250000

5. Given

Stock = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠 − 𝑄𝑢𝑖𝑐𝑘 𝐴𝑠𝑠𝑒𝑡

Stock = 400000 − 250000

Stock = 𝟏𝟓𝟎𝟎𝟎𝟎

6. Given

Average Collection Period = 2 month

4
Debtor = 𝑜𝑓 𝑄𝑢𝑖𝑐𝑘 𝐴𝑠𝑠𝑒𝑡𝑠
5

4
Debtor = 5 × 250000

Debtor = 200000

𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐷𝑒𝑏𝑡𝑜𝑟
Average Collection Period = 𝑁𝑒𝑡 𝐶𝑟𝑒𝑑𝑖𝑡 𝑆𝑎𝑙𝑒𝑠 × 12

𝑂𝑝𝑒𝑛𝑖𝑛𝑔 𝐷𝑒𝑏𝑡𝑜𝑟 + 𝐶𝑙𝑜𝑠𝑖𝑛𝑔 𝐷𝑒𝑏𝑡𝑜𝑟

Average Debtor =
2

100000 +200000
Average Debtor =
2
Average Debtor = 150000

150000
2 month = 𝑁𝑒𝑡 𝐶𝑟𝑒𝑑𝑖𝑡 𝑆𝑎𝑙𝑒𝑠 × 12

Net Credit Sales = 900000

7. Computation of Cash At Bank

Total Current Assets 400000

Less : Current Sales (150000)
Less : Debtors (200000)
Cash At Bank 50000

8. Given

Return on Net Worth = 10%

𝑃𝑟𝑜𝑓𝑖𝑡 𝐴𝑓𝑡𝑒𝑟 𝑇𝑎𝑥
Return on Net Worth = 𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ
× 100

Net Worth = 𝑆ℎ𝑎𝑟𝑒 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 + 𝑃&𝐿 𝐴/𝑐

Net Worth = 500000+150000

Net Worth = 650000

𝑃𝑟𝑜𝑓𝑖𝑡 𝐴𝑓𝑡𝑒𝑟 𝑇𝑎𝑥

10 % = × 100
650000

Profit After Tax = 65000

9. Given

Gross Profit Ratio = 15%

𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡
Gross Profit Ratio = × 100
𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠

𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡
15 = 900000
× 100

Gross Profit = 135000

Projected Income Statement

Particulars Amount Particulars Amount

To Opening Stock(Given) 1,05,000 By Sales(W.N-6) 900000
To Purchases 81000 By Closing Stock(W.N-5) 150000
To G/P c/d (W.N-9) 135000
1050000 1050000
To Selling & Distribution 18000 By G/P b/d(W.N-9) 135000
Expenses (2% on 900000)
To Depreciation 25000 By Misc. Receipt 33000
To Int. on Debenture 7000
(7% on 100000)
To Tax (given) 53000
To Net Profit(W.N-8) 65000
168000 168000

Balance Sheet As on 31.03.2003

Liabilities Amount Assets Amount

Share Capital(W.N-1) 500000 Free Hold Property(No 400000
Change)
P & L A/c(W.N-1) 150000 Plant & Machinery(W.N-2) 200000
7% Debenture(W.N-1) 100000 Stock(W.N-5) 150000
Sundry Creditor(W.N-1) 250000 Debtor(W.N-6) 200000
Bank(W.N-7) 50000
1000000 1000000