CORPORATE ACCOUNTING

1. Current Ratio is 3.5:1. Working Capital is Rs 90,000. Calculate the amount of Current Assets and Current
Liabilities.
2. Current liabilities of a company are Rs 75,000. If current ratio is 4:1 and liquid ratio is 1:1, calculate value of
current assets, liquid assets and inventory.
3. Handa Ltd.has inventory of Rs 20,000. Total liquid assets are Rs 1,00,000 and quick ratio is 2:1. Calculate
current ratio.
4. Calculate debt equity ratio from the following information:

Rs

Total Assets 15,00,000

Current Liabilities 6,00,000
Total Debts 12,00,000

5. Compute Stock Turnover Ratio from the following information:

Rs

Net Revenue from Operations 2,00,000

Gross Profit 50,000
Inventory at the end 60,000
Excess of inventory at the end over inventory in the 20,000
beginning

6. From the following information calculate:

(i) Gross Profit Ratio (ii) Inventory Turnover Ratio (iii) Current Ratio (iv) Liquid Ratio (v) Net Profit
Ratio (vi) Working capital Ratio:

Rs

Revenue from Operations 25,20,000

Net Profit 3,60,000

Cast of Revenue from Operations 19,20,000

Long-term Debts 9,00,000

Trade Payables 2,00,000
Average Inventory 8,00,000
Current Assets 7,60,000
Fixed Assets 14,40,000
Current Liabilities 6,00,000
Net Profit before Interest and Tax 8,00,000

7. Calculate Inventory Turnover Ratio if:

Inventory in the beginning is Rs 76,250, Inventory at the end is 98,500, Gross Revenue from Operations is
Rs 5,20,000, Return Inwards is Rs 20,000, Purchases is Rs 3,22,250.

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 CORPORATE ACCOUNTING
8. Calculate Inventory Turnover Ratio from the data given below:

Rs

Inventory at the beginning of the year 10,000

Stock* at the end of the year 5,000
Carriage 2,500
Revenue from Operations 50,000
Purchases 25,000

9. A trading firm’s average inventory is Rs 20,000 (cost). If the inventory turnover ratio is 8 times and the firm
sells goods at a profit of 20% on sale, ascertain the profit of the firm.
10. You are able to collect the following information about a company for two years:

2015-16 2016-17
Book Debts on Apr. 01 Rs 4,00,000 Rs 5,00,000
Book Debts on Mar. 31 Rs 5,60,000
Stock in trade on Mar. 31 Rs 6,00,000 Rs 9,00,000
Revenue from Operations (at gross Rs 3,00,000 Rs 24,00,000
profit of 25%)

11. The following Balance Sheet and other information, calculate following ratios:
(i) Debt-Equity Ratio (ii) Working Capital Turnover Ratio (iii) Trade Receivables Turnover Ratio
Balance Sheet as at March 31, 2017
Particulars Note No. Rs.
I. Equity and Liabilities:

1. Shareholders’ funds
a) Share capital 10,00,000
b) Reserves and surplus 9,00,000
2. Non-current Liabilities

a) Long-term borrowings 12,00,000

3. Current Liabilities
a) Trade payables 5,00,000
Total 36,00,000
II. Assets
1. Non-current Assets
a) Fixed assets
Tangible assets 18,00,000
2. Current Assets
a) Inventories 4,00,000
b) Trade Receivables 9,00,000
c) Cash and cash equivalents 5,00,000

Total 36,00,000

Additional Information:
Revenue from Operations Rs. 18,00,000 Calculate:
(Debt-Equity Ratio 0.63:1; Working Capital Turnover Ratio 1.39 times; Trade Receivables Turnover Ratio 2 times)

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 CORPORATE ACCOUNTING
12. From the following, calculate (a) Debt Equity Ratio (b) Total Assets to Debt Ratio (c) Proprietary Ratio.

Rs

Equity Share Capital 75,000

Preference Share Capital 25,000
General Reserve 45,000
Accumulated Profits 30,000
Debentures 75,000
Sundry Creditors 40,000
Outstanding Expenses 10,000

13. (i) From the following, calculate ‘Trade receivables turnover ratio”.
Total revenue from operations for the year – ₹ 8,40,000
Cash revenue from operations – 40% of credit revenue from operations
Closing trade receivables – ₹ 2,00,000
Excess of closing trade receivables over opening trade receivables ₹ 80,000
(ii) From the following information calculate ‘Interest coverage ratio’
Profit after interest and tax – ₹ 4,97,000
Rate of income tax – 30%
12% debentures – ₹ 6,00,000

14. From the following information, calculate any two of the following ratios
(i) Debt equity ratio
(ii) Working capital turnover ratio
(iii) Return on investment
Information Equity share capital ₹ 50,000; general reserve 15,000; statement of profit and loss after tax
and interest ₹ 15,000; 9% debenture ₹ 20,000; creditors ₹ 15,000; land and building ₹ 65,000; equipments
₹ 15,000; debtors ₹ 14,500 and cash ₹ 5,500; revenue from operations for the year ended 31st March,
2011 was ₹ 50,000. Tax rate 50%.

15. from the following calculate the ‘gross profit ratio’ and ‘working capital turnover ratio’

Information Amt (₹)

Revenue from Operations 30,00,000

Cost of Revenue from Operations 20,00,000

Current Assets 6,00,000

Current Liabilities 2,00,000

Paid-up Share Capital 5,00,000

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 CORPORATE ACCOUNTING
16. From the following information related to Naveen Ltd, calculate (i) Return on investment (ii) Total assets to
debt ratio. Information Fixed assets ₹ 75,00,000; current assets ₹ 40,00,000; current liabilities ₹
27,00,000; 12% debentures ₹ 80,00,000 and net profit before interest, tax and dividend ₹ 14,50,000.

17. From the given information calculate the following

(i) Cost of revenue from operations
(ii) Opening and closing inventory
(iii) Quick assets
(iv) Current assets
Information Inventory turnover ratio 6 times, inventory at the end is ₹ 6,000 more than the inventory in
the beginning, revenue from operations (all credits) ₹ 2,40,000, Gross profit 25% on cost, current liabilities
₹ 80,000, quick ratio 080 : 1

18. A company earn gross profit 25% on cost. For the year ended 31st March, 2017 its gross profit was ₹
5,00,000; equity share capital of the company was ₹ 1,00,00,000; reserves and surplus ₹ 2,00,000; long-
term loan ₹ 3,00,000 and non-current assets were ₹ 10,00,000.
Compute the ‘working capital turnover ratio of the company.

19. Y Ltd’s profits after insterest and tax was ₹ 1,00,000. Its current assets were ₹ 4,00,000 current liabilities ₹
2,00,000; fixed assets ₹ 6,00,000 and 10% long-term debt ₹ 4,00,000. The rate of tax was 20%. Calculate
‘Return on Investment of Y Ltd.

20. From the following information calculate interest coverage ratio. Net profit after interest and tax ₹
1,20,000; Rate of income tax 40% ; 15% debentures ₹ 1,00,000; 12% mortgage loan ₹ 10,000.

21. G Ltd. has furnished the following information relating to the year ended 31st March, 2017 and31st
March, 2018:
31st March, 31st March,
2017 2018
Share Capital 40,00,000 40,00,000
Reserve and Surplus 20,00,000 25,00,000
Long term loan 30,00,000 30,00,000
 Net profit ratio: 8%
 Gross profit ratio: 20%
 Long-term loan has been used to finance 40% of the fixed assets.
 Stock turnover with respect to cost of goods sold is 4.
 Debtors represent 90 days sales.
 The company holds cash equivalent to 1½ months cost of goods sold.
Ignore taxation and assume 360 days in a year
You are required to prepare Balance Sheet as on 31st March, 2018 in following format:
Liabilities (`) Assets (`)
Share Capital - Fixed Assets -
Reserve and Surplus - Sundry Debtors -
Long-term loan - Closing Stock -
Sundry Creditors - Cash in hand -

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 CORPORATE ACCOUNTING
22. The accountant of Moon Ltd. has reported the following data:

Gross profit ` 60,000

Gross Profit Margin 20 per cent
Total Assets Turnover 0.30:1
Net Worth to Total Assets 0.90:1
Current Ratio 1.5:1
Liquid Assets to Current Liability 1:1
Credit Sales to Total Sales 0.80:1
Average Collection Period 60 days
Assume 360 days in a year
You are required to complete the following:
Balance Sheet of Moon Ltd.
Liabilities ` Liabilities `
Net Worth Current Fixed Assets
Liabilities Stock
Debtors
Cash
Total Liabilities Total Assets

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