12th | Ts grewal 2021-2022 Question 151 to 155 | ch:4 Accounting Ratios

Page No 4.121:

Question 151:

Calculate Revenue from Operations of BN Ltd. from the following information:

Current Assets 8,00,000

Quick Ratio is 1.5:1

Current Ratio is 2:1.

Inventory Turnover Ratio is 6 times.

Goods were sold at a profit of 25% on cost.

(CBSE 2019)

 

Answer:

 

Current Ratio = Current Assets/ Current Liabilities

2:1 = 8,00,000/ Current Liabilities

Current Liabilities= 8,00,000/2=4,00,000

 

Quick Assets= 4,00,000×1.5=6,00,000

Working Capital = Current Assets - Current Liabilities

Working Capital = 8,00,000 – 4,00,000

Working Capital = 4,00,000

Inventory= Current Assets – Quick Assets

Inventory= 8,00,000 – 6,00,000

Inventory= 2,00,000

Inventory Turnover Ratio= Cost of Revenue from operation/Average Inventory

Cost of Revenue from operation = Inventory× Inventory Turnover Ratio

Cost of Revenue from operation = 2,00,000 × 6

Cost of Revenue from operation = 12,00,000

 

Profit of 25% on cost

therefore,

it is assumed that

Cost is equal to 100%

Revenue

=

Cost

+ Profit

125

=

100

+25

 

Hence,

Revenue= 12,00,000×125/100=15,00,000

 



Page No 4.121:

Question 152:

Following information is given about a company:

 

 `

 

 

 `

Revenue From Operations, i.e., Net Sales Gross Profit

1,50,000

 

Opening Inventory

29,000

Cost of Revenue From Operations

30,000

 

Closing Inventory

31,000

(Cost of Goods Sold)

1,20,000

 

Debtors

16,000


From the above information, calculate following ratios:

(i) Gross Profit Ratio,

(ii) Inventory Turnover Ratio, and 

(iii) Trade Receivables Turnover Ratio.

 

Answer:

(i)

Sales = 1,50,000

Gross Profit = 30,000

Gross Profit Ratio= Gross profit ×100/Net Sales

                        = 30,000×100/1,50,000

                        = 20%

(ii)

Opening Inventory = 29,000

Closing Inventory = 31,000

Average Inventory= Opening Inventory+ Closing Inventory/2

                                    =29,000+30,000/2

                                    =30,000

Cost of Goods Sold = 1,20,000

Inventory tunover ratio= Cost of goods sold / Average Inventory

                                    = 1,20,000/30,000

                                    = 4 Times

(iii)

Trade receivable turnover ratio= Net Credit sales/ Average Trade receivables

Trade receivable turnover ratio= 1,50,000/16,000

= 9.4 Times



Page No 4.122:

Question 153:

From the following information of Green star Ltd., Calculate Debt to Equity Ratio;

 

`

 

`

Trade payables

3,00,000

Trade Receivables

3,00,000

Others Current Liabilities (12.5% of Currents Assets)

 

Net Fixed Assets

30,00,000

Total Debts

28,00,000

Long Term Loan and Advances

1,60,000

Other Quick Assets

80,000

Non-Current Investments

40,000

Prepaid Expenses

20,000

Opening Inventory

3,20,000

Note; Closing Inventory 25% more than Opening Inventory.

Answer;

 

Debt equity ratio Debt upon equity

= 24,00,000 / 12,00,000 = 2 : 1

 

Closing inventory = 3,20,000 (opening inventory) + 25% of 3,20,000

Closing inventory = 3,20,000 (opening inventory) + 80,000

Closing inventory = 4,00,000

 

Current asset = trade receivable + quick assets + inventory + prepaid expenses

= 3,00,000+80,000 + 4,00,000 + 20,000 = 8,00,000

 

Current liability = trade payable + other current liability

= 3,00,000 + 12.5% of 8,00,000

= 3,00,000 + 1,00,000

= 4,00,000

 

Total asset = non-current assets (Net fixed assets + long term loans and advances + non-current investment) + current assets

= 30,00,000 + 1,60,000 + 40,000 +8,00,000=40,00,000

 

Equity = total assets - total debts

= 40,00,000 - 28,00,000 = 12,00,000



Page No 4.122:

Question 154:

From the following calculate:

(a) Current Ratio; and 
(b) Working Capital Turnover Ratio.

 

 

 `

(i)

Revenue from Operations

1,50,000

(ii)

Total Assets

1,00,000

(iii)

Shareholders' Funds

60,000

(iv)

Non-current Liabilities

20,000

(v)

Non-current Assets

50,000

Answer:

A) Current Ratio = Current Assets Current Liabilities                        
Current Assets = Total Assets – Non Current Assets
                           = 1,00,000 – 50,000
                           =
 ` 50,000


Total Assets = Total Liabilities = Shareholders’ Funds + Non-Current Liabilities + Current Liabilities
     1,00,000 = 60,000 + 20,000 + Current Liabilities
Current Liabilities =
 ` 20,000
       Current Ratio = 50,000/20,000 = 2.5 : 1

B) Working Capital Turnover Ratio = Revenue from Operations /Working Capital                                                         
Working Capital = Current Assets – Current Liabilities
                              = 50,000 – 20,000
                              =
 ` 30,000


Working Capital Turnover Ratio = 1,50,000/30,000 =  5 times

 



Page No 4.122:

Question 155:

From the following information obtained from the books of Kamal Ltd., calculate (i) Gross Profit Ratio and (ii) Net Profit Ratio:

 

`

Revenue from Operations

2,50,000

Purchases

1,05,000

Carriage Inwards

4,000

Salaries

30,000

Decrease in Inventory

15,000

Return Outwards

5,000

Wages

18,000

(CBSE 2020)

Answer:

(i) Gross Profit= Revenue- Net Purchase- Carriage Inwards- Wages- Decrease in Inventory

Gross Profit= 2,50,000- (1,05,000-5,000)- 4,0000 – 18,000-15,000

Gross Profit=1,13,500

Gross Profit=1,13,500×100/2,50,000 =45.20%

(ii) Net Profit= Gross Profit –Salaries

Net Profit= 1,13,000 – 30,000

Net Profit= 83,000

Net Profit=83,500×100/2,50,000 =33.20%

 

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Chapter-4: Accounting Ratios | 2021-2022

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