67
Illustration 66. From the following details, make out the Balance Sheet with as details as possible :
(i) Stock Velocity
6
(ii) Capital Turnover Ratio
2
(ii) Fixed Assets Turnover
4
(iv) Gross Profit Turnover Ratio
20%
(v) Debtors Velocity
2 months
(vi) Creditors Velocity
73 days.
The gross profit was * 60,000. Reserve & Surplus amounts to 20,000. Closing stock was 5,000
in excess of opening stock.
Answers
Explanation:
Working Capital 1.5
If Working Capital Is 1.5, Current Asset Will Be 2.5.
If Working Capital Is Rs.45,000, Current Assets Will Be Rs.75,000
Current Assets = Rs.75,000
Current Liability
Current Liability = Current Assets – Working Capital
= Rs.75,000 – Rs.45,000
= Rs.30,000
Fixed Assets
Shareholders’ Fund+ Current Liabilities = Fixed Assets + Current Assets
Shareholders’ Fund=Fixed Assets + Current Assets – Current Liabilities
= Fix
ed Assets + Rs.75,000 – Rs.30,000
= Fix
ed Assets + Rs.45,000
Let The Shareholders’ Fund Be X, Fixed Assets Will Be ¾ X
X = Rs. ¾ X + Rs.45,000
¼ X = Rs.45,000
X = Rs.1,80,000
¾ X = Rs.1,35,000
Fixed Assets = Rs.1,35,000
Shareholders Funds = Rs.1,35,000 + Rs.45,000
= Rs.1,80,000
Stock
Quick Assets
Liquid Ratio = -------------------
Quick Liabilities
Quick Assets = Current Assets – Stock
Quick Liabilities = Current Liabilities – Bank Overdraft
Let The Value Of Stock Be X.
Quick Assets Rs.75,000 – X
-------------------- = ---------------------
Quick Liabilities 30,000 – 10,000
75,000 - X
= ------------- = 1.5
20,000
Cross Multiplying
75,000 – X = 20,000 X 1.5
75,000 – X = 30,000
X
= 45,000
Stock = Rs.45,000
Quick Assets = Rs.75,000 – Rs.45,000
= Rs.30,000
Quick Liabilities = Rs.20,000
Equity
Shareholders’ Fund = Equity + Retained Earnings
Shareholders’ Fund = Rs.1,80,000 (As Calculated)
Retained Earnings = Rs.30,000 (As Given)
Equity = Rs.1,50,000
hope if it helps