Question

66. From the following details, make out a statement of proprietary funds:
(a) Long-term loans :
Rs. 50,000
(b) Working capital:
Rs. 80,000
(c) Reserves to capital
1:2
(d) Current ratio
2 times
(e) Liquid ratio
1.4 times
(1) Fixed assets to proprietors' funds 0.6
(g) There are no fictitious or intangible assets.​

Answer 1

Answer:

50000-80000=30000 it's answer

Answer 2

Answer:

Debt- Equity Ratio $=\frac{\text { Long }-\text { TermDebt }}{\text { Shareholder'sF unds }}$

Total Assets = Total Liabilities + Shareholder's Funds

Total Assets = Current Assets + Non-Current Assets

$=1,80,000+7,20,000=9,00,000$

Total Liabilities = Long Term Borrowings + Long-Term Provisions + Current Liabilities

$=4,00,000+2,00,000+1,00,000=7,00,000$

Therefore, Shareholder's funds = Total Assets Total Liabilities $=9,00,000- 7,00,000 = 2,00,000 \\\\Long-Term Debt = Long Term Borrowings + Long-term Provisions$

$=4,00,000+2,00,000= Rs 6,00,000$

Therefore, Debt -the equity ratio $=\frac{6,00,000}{2,00,000}=3: 1$

(b) Current ratio $=\frac{\text { Current Assets }}{\text { CurrentLiabilities }}$

(1) A bill payment of Rs. 9,000 was met on maturity will affect:

• Trade Payable will reduce by Rs.9,00o
• Cash will reduce by Rs. 9,000

Simultaneous decreases in current assets and current liabilities will improve the current ratio

Issue of share of Rs.10,00,000 to the vendor of machinery will affect the following

• Increases in the balance of machinery
• Increase in the amount of share capital

This transaction will neither affect current liabilities nor current assets. Thus, the current ratio will remain unchanged.