Calculate current ratio. Quick ratio, Stock turnover ratio. Debtor turnover ratio, Average
collection period. Creditor turnover ratio. Average Payment period from the following:
Rs.
The Balance Sheet of Punjab Auto Limited as on 31-12-2002 was as follows:
Particular
Rs.
Particular
Equity Share Capital
40,000 Plant and Machinery
Capital Reserve
8,000 Land and Buildings
8% Loan on Mortgage
32,000 Furniture & Fixtures
Creditors
16,000 Stock
Bank overdraft
4,000 Debtors
Taxation:
Investments (Short-term)
Current
4,000 Cash in hand
Future
4,000
Profit and loss Alc
12.000
1,20,000
24.000
40,000
16,000
12,000
12,000
4,000
12,000
1,20,000
COGS: Rs. 60,000
Sales: Rs. 2, 40,000
Purchases: Rs. 3, 00.000
Answers
Answer:
see below
Explanation:
Balance Sheet of Zoom Ltd as at 31.3.2018
Capital and Liabilities Rs. Assets Rs.
Share Capital 5,00,000 Fixed assets 6,00,000
Reserves & Surplus 2,50,000 Stock 2,00,000
Long term borrowings 1,50,000 Debtors 2,50,000
Current liabilities 2,00,000 Bank 50,000
11,00,000 11,00,000
Working Notes
Assume Current Liabilities 1.0
Current Assets are 2.5
Therefore, Difference or working capital 1.5
Given, Working Capital Rs. 3,00,000
Current Assets =Rs.3,00,000×2.5/1.5= Rs. 5,00,000
Current Liabilities = Rs. 2,00,000
Given, Liquidity Ratio = 1.5
Liquid Assets Rs.2,00,000×1.5= Rs. 3,00,000
Therefore Stock = (Current Assets - Liquid Assets)=
Rs.5,00,000−Rs.3,00,000
Stock =Rs.2,00,000
Cost of Sales (as stock turnover is 6)=Rs.2,00,000×6= Rs. 12,00,000
Sales (G.P ratio 20%)=Rs.12,00,000+[(20/80)×12,00,000]
Sales =15,00,000
∗
Fixed Assets =Rs.12,00,000/2=Rs.6,00,000
Debtors =Rs.15,00,000/6=Rs.2,50,000
∗∗
Net worth =Rs.6,00,000×1/0.8=Rs.7,50,000
Reserve and Surplus, 1/3rd of net worth =Rs.2,50,000
Share Capital =Rs.7,50,000−Rs.2,50,000=Rs.5,00,000
∗
Alternatively, candidates may use fixed assets turnover ratio for computation of sales
∗∗
The balance of Debtors can be calculated as a balancing figure in the balance sheet.