Question

with the help of the information given below prepare a trading account, profit and loss account and balance sheet of x ltd
1. gross profit ratio = 25%
2. net profit/sales =20%
3. sales/inventory ratio =10
4. fixed asset/ total current asset =5/7 5.current ratio =1
6. fixed asset/share capital=5/4
7. fixed asset =₹10, 00,000
8. closing stocks =₹1, 00,000​

Answer 1

Answer:

sales/inventory ratio=10

Answer 2

Answer:

1. Fixed Asset is Rs. 10,00,000

Fixed Assets/Capital=5/4

Therefore, Capital-Rs. 10,00,000×4/5=Rs. 8,00,000.

2. Capital is 1/2 of Total Liabilities

Therefore Liabilities=Rs. 8,00,000×2=Rs. 16,00,000

3. Net Profit is 1/5 of Capital

Therefore Net Profit=Rs. 8,00,000×1/5=Rs. 1,60,000

4. Net Profit is 20% of Sales

Therefore Sales=Rs. 1,60,000×100/20=Rs. 8,00,000

5. Gross Profit Ratio=25% of Sales

Therefore, Gross Profit=Rs. 8,00,000×25%=Rs. 2,00,000

6. Stock Turnover Ratio(i.e., Cost of sales/Average Inventory) is 10

Cost of Sales=Sales−Gross Profit

=Rs. 8,00,000−Rs. 2,00,000

=Rs. 6,00,000

Therefore Average Inventory=Rs. 6,00,000/10=Rs. 60,000

7. Closing Stock is Rs. 1,00,000

Average Inventory=Rs. 60,000

Therefore, Opening Stock=(Rs. 60,000×2)-Rs. 1,00,000=Rs. 20,000

8. Fixed Assets is Rs. 10,00,000

Fixed Assets/Total Current Assets=5/7

Therefore, Total Current Assets is 10,00,000×7/5=Rs. 14,00,000

Closing Stock=Rs. 1,00,000

Therefore other Current Assets=Rs. 13,00,000.

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