Question

From the following particulars extracted from the books of Arvind Ltd. compute the
Current ratio, Stock‐Turnover Ratio, Creditors' Turnover Ratio, and Average Debt
Collection period and comment upon the same.
31‐3‐2019 31‐3‐2020
Rs. Rs.
Bills Receivable 30,000 60,000
Bills Payable 60,000 30,000
Sundry Debtors 1,20,000 1,50,000
Sundry Creditors 75,000 1,05,000
Stock‐in‐trade 96,000 1,44,000
Additional information: (a) On 31‐12‐2020, there were assets: Building Rs. 2,00,000,
Cash Rs.1,20,000 and Cash at Bank Rs. 96,000. (b) Cash purchases Rs.1,38,000. (c) Cash
sales Rs.1,50,000. Rate of gross profit 25% on sales and actual gross profit was
Rs.1,50,000.

Answer 1

Answer:

From the following prepare Bank Reconciliation statement in the books of

Rajath and co., as on 30.9.2020.

a. Overdraft balance as per cashbook Rs. 28,470.

b. Interest allowed by bank of Rs.200 was entered twice in the cash

book.

c. It was found that total of one page on the payment side of the cash

book which was Rs. 1,250 was written as Rs.1,520 on the next page.

d. A cheque of Rs.32,000 issued to Insurance company was not yet

presented for payment

e. Out of cheques issued for Rs.7,500 cheques of Rs.5,000 were

presented for payment till the date.

f. Out of the cheques presented for payment one cheque of Rs.700

was not honored due to some technical reasons. No entry was passed

in the cash book for dishonor.