Analysis Book For Class 12 Commerce Accounting Students

I am the Best  Financial Statement of a Company |Class-XIIth
Chapter 1 Financial Statement

of a Company
S.No. Items Sub Heading Heading
1. Term loan from Bank Long term borrowings NON CURRENT

LIABILITIES
2. Creditors for Goods Trade Payables CURRENT
LIABILITIES
3. Interest accrued but not Other Current liabilities CURRENT
due on loan LIABILITIES
4. P&L A/c (Cr.) Shown as positive balance SHAREHOLDERS
in Reserves and Surplus FUNDS
5. Loan Payable on Demand Short term borrowings CURRENT
LIABILITIES
6. Rent due but not yet paid Other Current liabilities CURRENT
LIABILITIES
7. Unpaid Dividends Other Current liabilities CURRENT
LIABILITIES
8. Unpaid Matured deposits Other Current liabilities CURRENT
LIABILITIES
9. Share Application Money Other Current liabilities CURRENT
due for Refund LIABILITIES
10. Provision for retirement Long Term Provisions NON CURRENT
benefit of employees LIABILITIES
11. Deferred Tax (Dr.) Deferred Tax Asset NON CURRENT
ASSET
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12. Interest Accrued on Other Current liabilities CURRENT

unpaid matured deposits LIABILITIES
13. Calls in Arrears Notes to accounts SHAREHOLDERS
FUNDS
14. Output GST Collected Other Current liabilities CURRENT
LIABILITIES
15. Matured Debentures Other Current liabilities CURRENT
LIABILITIES
16. Rs. 50,000 received for Money received against SHAREHOLDERS
share warrants share warrants FUNDS
17. 8% Debentures Long term borrowings NON CURRENT
LIABILITIES
18. Provisions for Employees Short term provisions CURRENT
benefit LIABILITIES
19. Models & Designs Fixed Asset (Intangible CURRENT ASSETS
Asset)
20. Employees Provident Long term provision NON CURRENT
Fund LIABILITIES
21. Provision for Long term provision NON CURRENT
contingencies LIABILITIES
22. Mortgage Loan Long term borrowings NON CURRENT
LIABILITIES
23. Provision for Expenses Short term Provisions CURRENT
LIABILITIES
24. Debenture Redemption Reserves and surplus SHAREHOLDERS
reserve FUNDS
25. Bonds Long term borrowings NON CURRENT
LIABILITIES
26. Premium on redemption of Long term borrowings NON CURRENT
Debentures LIABILITIES

27. B/P of 3 months Trade Payables CURRENT

LIABILITIES
28. Cash Credit Short term borrowings CURRENT
LIABILITIES
29. Calls in Advance Other Current liabilities CURRENT
LIABILITIES
30. P&L A/c(Dr.) Reserves and Surplus(as a SHAREHOLDERS
negative figure) FUND
31. Commission Received in Other Current liabilities CURRENT
Advance LIABILITIES
32. ESI Payable Short term provisions CURRENT
LIABILITIES
33. Provision for warranties Long term provision NON CURRENT
LIABILITIES
34. Provision for Retirement Long term provision NON CURRENT
Benefits LIABILITIES
35. Share Forfeited A/c Share capital SHAREHOLDERS
FUND
36. Provision for Doubtful Short term provisions CURRENT
Debts LIABILITIES
37. Deferred Tax (Cr.) Deferred tax liability NON CURRENT
LIABILITIES
38. Creditors of 14 months for Other Current Liabilities NON CURRENT
Machine LIABILITIES
39. Share Application Money Share Application EQUITY AND
due for allotment Money pending allotment LIABILITIES
40. Proposed Dividend Short term provisions CURRENT
LIABILITIES
41. Subscribed Capital Share capital SHAREHOLDERS
FUND

42. Loan Payable in 6 months Short term borrowings CURRENT

LIABILITIES
43. Interest Payable on Other Current Liabilities CURRENT
Application Money due LIABILITIES
for Refund
44. Provision for Gratuity Long term provisions NON CURRENT
LIABILITIES
45. Premium on Redemption Reserves and Surplus SHAREHOLDERS
of pref.shares FUND
46. Revaluation Reserve Reserves and Surplus SHAREHOLDERS
FUND
47. Public Deposits Long term borrowings NON CURRENT
LIABILITIES
48. Current Maturity of Other Current Liability CURRENT
L.T.Loan LIABILITIES
49. Interest accrued and due Other Current CURRENT
on Debentures Liabilities LIABILITIES
50. Provision for Tax Short term provisions CURRENT
LIABILITIES
51. Service & operating rights Fixed Asset (Intangible NON CURRENT
Asset) ASSETS
52. Capital Advance for Fixed Asset (capital work NON CURRENT
Machine in progress) ASSETS
53. Debtors Trade Receivables CURRENT ASSETS
54. Unamortized Expense Other Non Current Assets NON CURRENT

upto 5 years ASSETS
55. Investment in shares of X Current investments CURRENT ASSETS
Ltd(8 months)
56. Licenses and Franchises Fixed Asset (Intangible NON CURRENT
Asset) ASSETS

57. Cheques/Drafts in Hand Cash and Cash Equivalents CURRENT ASSETS
58. Prepaid Wages Other Current Assets CURRENT ASSETS

59. Loose Tools Inventories CURRENT ASSETS
60. Computers Fixed Asset (Tangible NON CURRENT

Asset) ASSET
61. Property Purchased for Non Current Investments NON CURRENT
resale (Goods Business) ASSET
62. Mutually Funds Purchased Non Current Investment NON CURRENT
ASSET
63. Arrears of fixed Contingent Liabilities CONTINGENT
cumulative Dividend SHOWN AS FOOT NOTE LIABILITY &
COMMITTMENT
64. Goods in transit Inventories CURRENT ASSET
65. Recipies Fixed Asset (Intangible NON CURRENT
Asset) ASSET
67. Building Under Fixed Asset (capital work NON CURRENT
Construction in progress) ASSET
68. Vehicles Fixed Asset (Tangible NON CURRENT
Asset) ASSET
69. Computer Software Fixed Asset (Intangible NON CURRENT
Asset) ASSET
70. Unamortized (to be Other Current Assets CURRENT ASSET
written off in 12 months)
Discount on issue of
debenture
71. Work in progress Fixed Asset (capital work NON CURRENT
(Machine) in progress) ASSET
72. Claims not acknowledged Contingent liabilities CONTINGENT
as debt SHOWN AS FOOT NOTE LIABILITIES &
COMMITTMENTS

73. Formulae Fixed Asset (Intangible NON CURRENT

Asset) ASSET
74. Office Equipments Fixed Asset (Tangible NON CURRENT
Asset) ASSET
75. Work in progress (Goods) Inventories CURRENT ASSET
76. Prepaid Insurance Other Current Assets CURRENT ASSETS
77. Patents Fixed Asset (Intangible NON CURRENT

Asset) ASSET
78. Intellectual Property Fixed Asset (Intangible NON CURRENT
Rights Asset) ASSET
79. Deposits for Telephone Other Current Assets CURRENT ASSETS
80. B/R for 13 months Other Non Current Assets NON CURRENT
ASSET
81. Spares and stores Inventories CURRENT ASSET
82. Accumulated Depreciation Other current liabilities CURRENT

LIABILITIES
83. Freehold Premises Fixed Asset (Tangible NON CURRENT
Asset) ASSET
84. Leasehold Premises Fixed Asset (Tangible NON CURRENT
Asset) ASSET
85. Uncalled Liability on Share Capital SHAREHOLDERS
partly paid up shares FUND
86. Advances to Staff Other Current Asset CURRENT ASSET
87. Bank overdraft Short term borrowings CURRENT

LIABILITIES
88. Investment in Land for Non Current Investments NON CURRENT
investment purpose ASSET
89. Unsecured Loans Long term borrowings NON CURRENT
LIABILITIES

90. Intellectual Property Fixed Asset (Intangible NON CURRENT

Rights(or Patents) being Asset under development) ASSET
developed
91. Mining Rights Fixed Asset (Intangible NON CURRENT
Asset) ASSET
92. Deposit with customs Long term loans and NON CURRENT
authority advances ASSET
93. Loosetools Inventories CURRENT ASSET
94. Treasury Bills Current Investments CURRENT ASSET
95. Models and designs Fixed Asset (Intangible NON CURRENT

Asset) ASSET
96. Bills discounted but not Contingent liabilities CONTINGENT
yet matured SHOWN AS FOOT NOTE LIABILITIES &
COMMITTMENTS
97. Copy-Rights Fixed Asset (Intangible NON CURRENT
Asset) ASSET
98. Bank Balance (Dr.) Cash and Cash Equivalents NON CURRENT
ASSET
99. Debenture Redemption Current Investments CURRENT ASSETS
Investment
100. Mastheads Fixed Asset (Intangible NON CURRENT
Asset) ASSET

CL & Non-Cl
1. Classify the liabilities given below as Non-current Liabilities and Current

Liabilities giving reasons for such classification:
Expected Period of
Opening Cycle (in
Particulars Payment (in
Months)
Months)
(i) Trade Payables 11 8

(ii) Trade Payables 11 12
(iii) Trade Payables 11 15
(iv) Trade Payables 14 13
(v) Trade Payables 20 22
(vi) Creditors 15 15
(vii) Trade payables 9 11
PROFIT & LOSS ACCOUNT ITEMS
S.No. Items Major-Head Sub -Head
1. Machine Depreciation
2. Raw materials
3. Leave encashment
4. Interest income
5. Consumption of stores and spare parts
6. Interest expenses
7. Freight

8. Net gain on foreign currency

9. Staff welfare expenses
10. Net gain on sale of investments

11. Sale of scrap
12. Power and fuel

13. Contribution to provident fund
14. Discount on issue of debentures

15. Other borrowing cost
16. Amortized copyrights

17. Loss on issue of debentures
18. Carriage
19. Sale of product
20. Profit on sale of investment

21. Dividend income
22. Commission received

23. Depreciation on building
24. Bank interest

25. Finished goods
26. Work in progress

27. Rent received
28. Advertisement expenses

29. Discount received

30. Interest on loans

31. Rent of property let-out
32. Audit fee

33. Postage and telegram
34. Insurance
35. Electricity charges
36. Postage charges

37. Telephone charges
38. Bad debts

39. Provision for bad debt
40. Interest on fixed deposits

Answers & Solution
CL & Non-Cl
1. (NON-CL= (iii), (v); CL= ((i),(ii),(iv),(vi),(vii) )
PROFIT & LOSS ACCOUNT ITEMS
S.No. Items Major-Head Sub -Head
1. Machine Depreciation Expenses Depreciation and

amortization expenses
2. Raw materials Expenses Cost of material
consumed
3. Leave encashment Expenses Employees benefit
expenses
4. Interest income Incomes Other income
5. Consumption of stores and spare Expenses Other expenses
parts
6. Interest expenses Expenses Finance Cost
7. Freight Expenses Other expenses
8. Net gain on foreign currency Expenses Finance Cost

9. Staff welfare expenses Expenses Employees benefit
expenses
10. Net gain on sale of investments Incomes Other income
11. Sale of scrap Revenue from Other operating revenue
operations

12. Power and fuel Expenses Other expenses

13. Contribution to provident fund Expenses Employees benefit
expenses
14. Discount on issue of debentures Expenses Finance Cost
15. Other borrowing cost Expenses Finance Cost
16. Amortized copyrights Expenses Depreciation and

17. Loss on issue of debentures Expenses Finance Cost
18. Carriage Expenses Other expenses

19. Sale of product Revenue from Revenue from operations
operations
20. Profit on sale of investment Incomes Other income
21. Dividend income Incomes Other income
22. Commission received Incomes Other income

23. Depreciation on building Expenses Depreciation and
24. Bank interest Expenses Finance Cost
25. Finished goods Expenses Purchase of stock in trade
26. Work in progress Expenses Purchase of stock in trade

27. Rent received Incomes Other income
28. Advertisement expenses Expense Other expenses

29. Discount received Incomes Other income
30. Interest on loans Expense Finance Cost

31. Rent of property let-out Incomes Other income

32. Audit fee Expense Other expenses

33. Postage and telegram Expense Other expenses
34. Insurance Expense Other expenses

35. Electricity charges Expense Other expenses
36. Postage charges Expense Other expenses

37. Telephone charges Expense Other expenses
38. Bad debts Expense Other expenses

39. Provision for bad debt Expense Other expenses
40. Interest on fixed deposits Expense Finance Cost

I am the Best  Comparative & Common Size |Class-XIIth
Chapter 3 Tools of Finanial

Statement Analysis
(Comparative & Common
Size)
1. Prepare comparative balance sheet and common size Balance sheet :
Particulars 31.3.2019 (Rs.) 31.3.2018 (Rs.)

I. EQUITY AND LIABILITY
1. Shareholder’s Fund
(a) Share Capital 5,00,000 4,00,000
(b) Reserves and Surplus 1,60,000 1,20,000
2. Current liabilities
Trade Payable 1,40,000 80,000
Total 8,00,000 6,00,000
II. ASSETS
1. Non-current Assets
Fixed Assets:
(a) Tangible Assets
(b) Intangible Assets

2. Current liabilities
(a) Inventories
(b) Trade Receivables
(c) Cash and Cash Equivalnets
Total 8,00,000 6,00,000

2. Prepare a comparative and common size statement of profit and loss of RAJA
Ltd. with the help of the following information:
Particular 31.03.2020 (Rs.) 31.03.2019 (Rs.)
Revenue from Operations 30,00,000 20,00,000

Expenses 12,00,000 10,00,000
Other Incomes 4,00,000 2,00,000
Income Tax 40% 40%
3. From the following information, prepare comparative statement of profit and

loss:
Particulars 31st March 2011 31st March 2012 (Rs.)
(Rs.)

Other Income 2,00,000 1,80,000
Cost of Materials Consumed 5,00,000 9,00,000
Other Expenses 1,00,000 1,50,000
Tax Rate 30% 30%

4. Following is the Comparative Statement of Profit and Loss of X Ltd. for two
consecutive years:
Comparative Statement of Profit & Loss
for the years ended 31st March, 2019 and 2020
Particulars Note 2019 2020 Absolute Percentage

No. Change Change
(Increase (Increase
or or
Decrease) Decrease)
1 2 3 4 5
A B
I. Revenue from operations Rs. Rs. Rs. %

II. Less: Expenses: 13,20,000 18,00,000 ___ ___
Cost of Materials
Consumed ––– ––– ––– –––
Other Expenses 1,40,000 2,00,000 ––– –––
Total Expenses ––– ––– ––– –––
III. Profit before Tax ––– ––– ––– –––
IV. Less: Tax 40% ––– ––– ––– –––
Profit after Tax 1,08,000 1,56,000 ––– –––

5. Following is the comparative balance sheet of K Fabrics Ltd.
Comparative balance sheet of K Fabrics ltd.
as at 31st March 2020 & 2019
Particulars Note 31.3.2020 31.3.2019 Absolute Percentage
No. Change Charge
(Increase (Increase
or or
Decrease) Decrease)
1 2 3 4 5
A B B–A=C C/A × 100
=D
I. EQUITY AND
LIABILITIES
1. Shareholder’s Funds:
(a) Share Capital 10,00,000 10,00,000 ––
(b) *Reserve 2,40,000 –– (20,000) (––)
2. Non-Current Liabilities:
Long term Borrowings 8,00,000 –– (––) (12.50)
3. Current Liabilities
(a) Short-Term Borrowings –– 7,00,000 4,00,000
(b) Trade Payables –– –– (––) (––)
Total 25,00,000 26,96,400 –– ––
II. ASSETS:
1. Non-Current Assets 16,00,000 16,00,000 –– ––
2. Current Assets:
(a) Inventory 5,20,000 17.00
(b) Trade Receivables 4,20,000 1,20,000
(c) Cash and Cash –– –– (––) (––)
Equivalents
Total –– –– –– ––

Additional information:
1. Trade Receivables as at 31st March, 2018 were Rs.3,25,000.
2. Revenue from Operations (Net Sales) for the year ended 31st March, 2019
and 31st March, 2020 is Rs.62,50,000 and Rs.90,00,000 respectively.
Net Credit Revenue from Operations being 60% of Revenue from

Operations in both the years.
You are required to fill up the missing figures in the Comparative Balance Sheet.
6. Fill in the missing figures in the following Common Size Balance Sheet:
Common Size Balance Sheet
as at 31st March, 2019 and 2020
Particulars Note Absolute Percentage of

No. Amounts Balance Sheet
Total
2019 2020 2019 2020
Rs. Rs. % %
I. EQUITY AND
LIABILITIES
1. Shareholder’s Funds 10,00,000 12,00,000 40 40
(a) Share Capital 3,00,000 3,00,000 –– ––
(b) Reserves & Surplus –– –– 18.4 20.67
2. Non-Current Liabilities –– –– –– ––
–– –– 100.00 100.00
II. ASSETS:
–– –– 80 76.67

1. Non-Current Assets –– –– –– ––
2. Current Assets
–– –– 100 100.00
7. Following is the common-size statement of profit and loss:
Common-Size Statement of Profit & Loss
for the years ended 31st March, 2019 and 2020
Particulars Note Absolute Proportionate

No. Amounts Amounts
2019 2020 2019 2020
Rs. Rs. %
I. Revenue from Operations 55,00,000 72,00,000 –– -
II. Other Income – –– 4.00 5.00
III. Total Revenue (I+II) –– –– ––
IV. Expenses: __ __ 46.00
(a) Purchase of Stock in Trade 45.00
(b) Change in Inventories of 4,30,000 3,88,000 ––
Stock in Trade –– –– 10.00 -
(c) Employee Benefit Exp. 6.00 10.00
(d) Finance Costs - - - 5.00
(e) Other Expenses -
Total Expenses 38,94,000 48,60,000
V. Profit before Tax (III – IV) –– –– ––
–– –– ––
You are required to fill in the missing figures.

I am the Best  Ratio Analysis |Class-XIIth
Chapter 4 Ratio Analysis
1. From the following information, compute Current Ratio & Liquid ratio:
Particulars (Rs.) Particulars (Rs.)

Trade Receivables (Sundry Debtors) 2,00,000 Bills Payable 1,00,000
Prepaid Expenses 80,000 Sundry Creditors 70,000
Cash and Cash Equivalents 50,000 Debentures 2,00,000
Short-term Investments 50,000 Inventories 1,20,000
Machinery 47,000 Expenses Payable 30,000
2. From the following Balance Sheet of C & C Ltd. as at 31 st March, 2018,
calculate Current Ratio and Liquid ratio:
Particulars (Rs.)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 5,00,000
(b) Reserves and Surplus 1,00,000
2. Non-Current Liabilities
Long-term Borrowings 7,00,000
(a) Short-term Borrowings 3,50,000
(b) Trade Payables 1,00,000
(c) Short-term Provisions 50,000
Total 18,00,000

II. ASSETS
1. Non-Current Assets
Fixed Assets: 12,80,000
Tangible Assets
2. Current Assets
(a) Inventories 2,20,000
(b) Trade Receivables 50,000
(c) Cash and Cash Equivalents 1,50,000
(d) Other Current Assets 1,00,000
Total 18,00,000
Note:
(i) Inventories includes Rs 20,000 as loose tools
(ii) Other Current Assets Includes Prepaid Expenses of Rs 30,000 and
Advance tax of Rs 20,000.
3. Following particulars are given to you :
Calculate the ratios showing Short term financial position of the firm. Also
calculate the working capital:
Partculars (Rs.)
Trade Investments 50,000
Marketable Securities 1,00,000
Tangible Fixed Assets 90,000
Intangible Assets (Goodwill) 60,000
Trade Receivables 60,000
Cash and Bank Balance 50,000
Trade Payables 20,000
Rent Payable 10,000

Dividend Payable 12,000

Inventories (including loose tools of Rs 10,000) 50,000
Long term Borrowings (8% Debentures) 70,000
Short term Borrowings (Bank Overdraft) 18,000
Short term Provisions:
Provision for Tax 40,000
Provision for doubtful debts 20,000
Income Tax Paid in Advance 50,000
4. Current Ratio is 2:1. Working Capital is Rs.1,20,000. Calculate the amount of
Current Assets and Current Liabilities.
5. Creditors Rs.40,000, Bills payable Rs.27,000, Debentures Rs.33,000,Outstanding
Expenses Rs.33,000. Working Capital is Rs.1,20,000. Calculate Current ratio.
6. Prepaid Expenses Rs.90,000, Trade Receivable Rs.1,20,000, Goodwill
Rs.57,000,Accrued Income Rs.90,000, Closing Inventory of Raw Material
Rs.40,000, Closing Inventory of Finished goods Rs.60,000, Loose tools
Rs.20,000. Working Capital is Rs.1,00,000. Calculate Current ratio & Acid test
ratio.
7. Current Ratio is 3:1 and Liquid Ratio is 1.5:1. If its Inventories are Rs.6,00,000,
find out its Current Liabilities; Current Assets and Quick Assets & working
Capital.
8. Current Ratio is 2:1 and Liquid Ratio is 1:1. If its Inventories are Rs.2,00,000,
find out its Current Liabilities; Current Assets and Quick Assets & working
Capital.
9. Current liabilities of a company are Rs.2,00,000. Its Current Ratio is 2:1 and
Liquid Ratio is 1.5:1. Calculate value of Inventories.
10. Current assets of a company are Rs.6,00,000. Its Current Ratio is 3:1 and Liquid
Ratio is 2:1. Calculate value of Inventories.

11. From the following data, calculate Current Ratio and Liquid Ratio :
Particulars (Rs.)
Liquid Assets 1,00,000
Inventories (Includes stores & spares of Rs.10,000) 20,000
Prepaid Expenses 10,000
Working Capital 40,000
12. Calculate Current Ratio and Liquid ratio from the following:
Working Capital Rs.8,00,000
Current Assets (Including Inventory Rs.4,00,000) Rs 20,00,000
Inventory includes Loose tools of Rs.2,00,000
13. The ratio of Current Assets (Rs.12,00,000) to Current Liabilities (Rs.10,00,000)
is 1.2:1. The accountant of the firm is interested in maintaining a Current Ratio
of 2:1, by paying off a part of the Current Liabilities. Compute the amount of
Current Liabilities that should be paid, so that the Current Ratio at the level of
2:1 may be maintained.
14. The ratio of Current Assets (Rs.10,00,000) to Current L₹iabilities is 2.5:1. The
accountant of this firm is interested in maintaining optimum Current ratio by
acquiring some Inventory on Credit. You are required to suggest him the amount
of Current Assets which must be acquired for this purpose.
15. Ratio of Current Assets (Rs.6,00,000) to Current Liabilities (Rs.4,00,000) is
1.5:1. The accountant of the firm is interested in maintaining a Current Ratio of 2
: 1, by paying a part of the Current Liabilities. Compute amount of Current
Liabilities that should be paid, so that Current Ratio at the level of 2:1 may be
maintained. (Delhi 2004)
16. A firm had Current Assets of Rs.4,00,000. It paid Creditors of Rs.1,00,000 by a
cheque. After the payment, the current ratio became optimum. Determine
Current Liabilities and Working Capital after and before the payment was made.
17. A firm had Quick Assets of Rs.2,00,000. It purchased inventory of Rs.1,00,000
on credit. After this transaction Quick ratio became optimum. Determine Current
Liabilities before & after purchase of Inventory.

18. State giving reason, whether the Current Ratio & Liquid ratio of a company will
improve or decline or not change in each of the following transactions if Current
Ratio is 3:1 and Quick ratio is 2:1
1. Cash collected from debtors
2. B/R received from trade receivables or B/R drawn.
3. Sale of goods on cost
4. Sale of Inventories cost Rs.50,000 for Rs.60,000.
5. Sale of Inventories cost Rs.50,000 for Rs.40,000.
6. Purchase of stock for cash.
7. Purchase of stock on credit.
8. Sale of a fixed asset on a credit of 2 months.
9. B/R dishonoured
10. B/R endorsed to trade payables.
11. Sale of a fixed asset on long-term deferred payment basis.
12. Purchase of a fixed asset for cash.
13. Repayment of a, Long term Loan
14. Conversion of a Debentures into equity shares.
15. Issue of new Shares/Debentures for cash.
16. Issue of new Shares/Debentures against purchase of Machinery.
17. Purchase of a fixed asset on a credit of 2 months.
18. Purchase of a fixed asset on long-term deferred payment basis,
19. Cash paid to Trade Payables or Cheque issued against a B/P.
20. B/P given to trade payables.
21. Trade Receivables include debtors of Rs.40,000 which were received in
cash.
22. Company purchased furniture of Rs.1,00,000. The vendor was paid by
issue of equity shares of Rs. 10 each at par.
23. Redeemed 9% Debentures with a maturity period of 8 months of
Rs.1,00,000.

24. Purchase of Loose Tools against cash.
25. Issue of bonus shares
26. Sale of Loose tools for cash
27. Payment of Salaries in advance by cheque
28. Payment of Dividend
29. Discounted a bills receivable of Rs.20,000 from bank. Bank charged
discount of Rs.500
30. Sale of Marketable securities at par
31. Sale of Marketable securities at profit
BALANCE SHEET BASED QUESTIONS

19. Total Assets Rs.12,00,000; Fixed Assets Rs.10,00,000; Capital Employed
Rs.11,00,000. There were no Long-term Investments. Calculate Current Ratio.
20. Capital Employed Rs. 40,00,000; Fixed Assets Rs. 30,00,000; Current Liabilities
Rs.10,00,000. There are no Long-term Investments. Calculate Current Ratio.
21. From the following calculate:
(i) Current Ratio; and
(ii) Quick Ratio
Total Debt 12,00,000 Long-term Borrowings 6,00,000
Total Assets 20,00,000 Long-term Provisions 4,00,000
Fixed Assets (Tangible) 7,00,000 Inventories 45,000
Non-current Investment 5,00,000 Prepaid Expenses 55,000
Long-term Loans and Advances 2,00,000
22. Calculate the Current Ratio from the following: -
Working Capital Rs. 30,000, Total Debt Rs. 45,000, Long term Debt Rs. 30,000.
23. Calculate Quick Ratio from the following:
Working Capital Rs.1,80,000, Total Debt Rs.4,90,000, Long term Debt
Rs.4,00,000, Stock Rs.35,000, prepaid Expenses Rs.55,000.

24. Calculate the current Ratio from the following information: -
Total Assets 3,00,000 Long term Borrowings 60,000
Fixed Assets 1,60,000 Non Current Investments 1,00,000
Shareholder’s Funds 2,00,000 Long term Provisions 20,000
SOLVENCY RATIOS
25. Calculate Debt Equity Ratio from the following particulars: -
Particulars (Rs.)
Share Capital 4,50,000
Reserve & Surplus 1,50,000
Long term Borrowings 10,00,000
Long term Provisions 2,00,000
Current Liabilities 90,000
Non Current Assets 17,70,000
Current Assets 1,20,000
26. Calculate Debt Equity Ratio from the following information: -
Particulars (Rs.)
Equity Share Capital 5,00,000
Preference Share Capital 2,00,000
General Reserve 40,000
Securities Premium reserve 20,000
Profit & Loss Balance 40,000
10% Debentures 4,00,000
Loan from Bank 1,50,000
Provision for retirement Benefits 50,000

27. Calculate Debt to Equity Ratio: Equity Share Capital Rs.10,00,000; General
Reserve Rs.2,00,000; Accumulated Profits Rs.3,00,000; 10% Debentures
Rs.7,50,000; Current Liabilities Rs.1,00,000.
28. From the following information, calculate Debt to Equity Ratio: -
Particulars (Rs.)
1,000 Equity Shares of Rs. 100 each fully paid 1,00,000
2,000; 9% Preference Shares of Rs. 100 each fully paid 2,00,000
General Reserve 95,000
Surplus, i.e., Balance in Statement of Profit and Loss 5,000
10% Debentures 8,00,000
29. Balance Sheet had the following amounts as at 31st March, 2018: -
10% Preference Share Capital 2,00,000 Current Assets 12,00,000
Equity Share Capital 20,00,000 Current Liabilities 8,00,000
Securities Premium Reserve 1,00,000 Investments (in other 11,00,000
Reserves and Surplus 3,00,000 companies)
Long-term Loan from kotak @ 9% 50,00,000 Fixed Assets–Cost 74,00,000
Depreciation Written off 14,00,000
30. Calculate Debt to Equity Ratio from the following information: -

Fixed Assets (Gross) 9,50,000 Current Assets 1,80,000
Accumulated Depreciation 1,50,000 Current Liabilities 2,00,000
Non-current Investments 57,000 10% Long-term Borrowings 2,00,000
Long-term Loans and Advances 63,000 Long-term Provisions 1,00,000

31. From the following Balance Sheet of NM Ltd. as at 31st March, 2020, calculate
Debt to Equity Ratio: -
Particulars (Rs.)
(a) Share Capital:
(i) Equity Share Capital 7,00,000
(ii) 10% Preference Share Capital 4,60,000
11,60,000
(b) Reserves and Surplus 40,000
Long-term Borrowings (Debentures) 3,00,000
(a) Trade Payables 3,30,000
(b) Other Current Liabilities 20,000
(c) Short-term Provisions: Provision for Tax 1,50,000
Total 20,00,000
II. ASSETS
Fixed Assets:
(a) Tangible Assets 4,00,000
(b) Intangible Assets 2,00,000
2. Current Assets
(a) Inventories 6,00,000
(b) Trade Receivables 6,00,000
Total 20,00,000

32. Assuming that the Debt-Equity Ratio is 2:1, state, giving reasons, which of the
following transactions would (i) Increase; (ii) Decrease; (iii) Not alter the Debt-
Equity Ratio :
(i) Issue of new shares (Preference/Equity) for Cash.
(ii) Cash received from Debtors
(iii) Purchased goods on credit
(iv) Issue of new shares (Preference/Equity) against purchase of fixed asset
(v) Buy-back of its own shares by a Company.
(vi) Payment to creditors
(vii) Repayment of Long term Borrowings.
(viii) Sale of a fixed asset at par.
(ix) Sale of a fixed asset at loss.
(x) Sale of a fixed asset at profit
(xi) Conversion of Debentures into Equity Shares
(xii) Issue of Debentures for Cash.
(xiii) Issue of Debentures against purchase of fixed asset.
(xiv)Purchase of a fixed asset on long-term deferred payment basis
(xv) Purchase of a fixed asset on a credit of 2 months.
(xvi)Payment of dividend
(xvii) Long term loan raised from bank
(xviii) Issue of Bonus Shares.
33. Total Assets Rs.15,50,000; Total Debts Rs.10,50,000; Current Liabilities
Rs.5,50,000. Calculate Debt to Equity Ratio.
34. Capital Employed Rs.10,00,000; Shareholders' Funds Rs. 4,00,000. Calculate
Debt to Equity Ratio.

35. Total Assets Rs.5,00,000; Total Debts Rs.3,00,000; Current Liabilities Rs.
1,00,000. Calculate Debt to Equity Ratio.
36. Calculate Debt Equity Ratio from the following: -
(i) Total Assets 10,00,000
(ii) Total Debt 4,00,000
(iii) Current Liabilities 1,00,000
37. Calculate Debt Equity Ratio from the following: -

Total Debt 30,00,000 Current Assets 15,00,000
Shareholder’s Funds 12,00,000 Working Capital 9,00,000
Reserve and Surplus 8,00,000
38. Calculate Total Assets to Debt Ratio from the following information: -
Long-term Debts Rs. 3,00,000; Total Assets Rs. 12,00,000.
39. Compute Total Assets to Debt Ratio & Proprietary Ratio from the following
information: -
Particulars (Rs.)
Fixed Assets 10,00,000
Non Current Investments 3,00,000
Total Debts 12,50,000
Trade Payables 1,50,000
Outstanding Expenses 3,00,000
Bank Overdraft 1,00,000

40. On the basis of the following information, calculate Total Assets to Debt Ratio &
Proprietary Ratio:
Capital Employed 40,00,000 Share Capital 35,00,000
Current Liabilities 10,00,000 10% Debentures 10,00,000
Land and Building 32,00,000 General Reserve 3,00,000
Trade Receivable 8,00,000 Surplus, i.e., Balance in
Cash and Cash Equivalents 6,00,000 Statement of Profit and Loss 2,00,000
Investment (Trade) 4,00,000
41. Calculate Total Assets to Debt Ratio & Proprietary Ratio from the following
information: -
Particulars (Rs.)
Shareholder’s Funds 20,00,000
Total Debts 12,00,000
Current Liabilities 2,00,000
42. Calculate Total Assets to Debt Ratio and Proprietary Ratio from the following
information: -

Long-term Borrowings 5,00,000 Share Capital 8,00,000
Long-term Provisions 1,00,000 Security Premium Reserve 2,00,000
Trade Payables 3,00,000 General Reserve 1,00,000
Surplus i.e. Balance in (2,00,000)
Statement of Profit and Loss

43. Calculate Total Assets to Debt Ratio and Proprietary Ratio from the following
information: -
Particulars (Rs.)
Capital Employed 30,00,000

Shareholder’s Funds 24,00,000
44. Total Debt Rs. 10,00,000; Shareholders' Funds Rs. 10,00,000; Reserves and
Surplus Rs. 2,00,000; Current Assets Rs. 5,00,000; Working Capital Rs.
1,00,000. Calculate Total Assets to Debt Ratio & Proprietary Ratio.
45. From the following information, calculate Proprietary Ratio Debt Equity & Total
Assets to Debt ratio: -
Balance Sheet of Edumission
as at 31 st March, 2020
Particulars (Rs.)

(a) Share Capital 4,00,000
(b) Reserves and Surplus 2,00,000
(a) Debentures 1,00,000
(b) Loans 50,000
(c) Long-term Provisions (Provision for Tax) 1,00,000
Total 8,00,000

II. ASSETS
Fixed Assets (Tangible Assets) 3,00,000
2. Current Assets
(a) Current Investments 1,00,000
(b) Inventories 2,50,000
Total 8,00,000
46. Calculate (i) Debt-Equity Ratio and (ii) Proprietory Ratio (iii) Total Assets to
Debt ratio from the following data: -
Particulars (Rs.)
Equity Share Capital 20,00,000
General Reserve 15,00,000
Profit & Loss Balance (5,00,000)
6% Debentures 8,00 ,000
Loan from ICICI 7,00,000
Goodwill 20,00,000
Other Non Current Assets 24,00,000
47. State with reason, whether the Proprietary Ratio will improve, decline or will not
change because of the following transactions if Proprietary Ratio is 0.6:1:
(i) Obtained a loan of Rs.5,00,000 payable after ten years.
(ii) Purchased building of Rs.2,00,000 by cheque.
(iii) Redeemed debentures Rs.1,00,000.
(iv) Issued equity shares Rs.1,00,000 at a premium of Rs.1,00,000

(v) Conversion of debentures into preference shares Rs.4,00,000.
(vi) Buy-back of its own shares by a company Rs.2,00,000.
(vii) Purchase of a fixed asset for cash Rs.1,00,000.
(viii) Purchase of a fixed asset on long-term deferred payment basis
Rs.2,00,000.
(ix) Sale of a fixed asset costing Rs.1,00,000 for Rs.80,000.
(x) Sale of a fixed asset costing Rs.2,00,000 for Rs.2,50,000.
(xi) Issue of Bonus Shares Rs.1,00,000.
INVENTORY/STOCK TURNOVER RATIO
48. Calculate inventory turnover ratio from the data given below: -
Particulars (Rs.)
Inventory at the beginning of the year 60,000
Inventory at the end of the year 1,40,000
Purchases 3,10,000
Wages 60,000
Carriage inwards 30,000
Revenue from Operations (Sales) 6,00,000
49. From the following information related to a company calculate inventory
turnover ratio:
Opening inventory Rs.20,000; Closing inventory Rs.22,000; Purchases
Rs.80,000; Wages Rs.9,000; Carriage outwards Rs.2,000; Returns outwards
Rs.1,000; Revenue from operations Rs. 80,000; Carriage inwards Rs.4,000; Rent
Rs.5,000. (C.B.S.E. 2017, Comptt.)
50. From the following data, calculate Inventory Turnover Ratio:
Cost of Revenue from Operations (Cost of Goods Sold) Rs.3,00,000; Purchases
Rs.2,00,000; Opening Inventory Rs.60,000, freight inwards Rs.20,000, freight
outwards Rs.25,000, Wages salaries Rs.40,000, Advertisement Rs.15,000,
factory heating & lighting Rs.50,000, trade expenses Rs.12,000.

51. Opening Inventory is Rs. 45,000; Closing Inventory Rs.55,000 ; Revenue from
Operations, i.e., Net Sales Rs.5,00,000; Gross Profit 20% on Sales. Calculate
Inventory Turnover Ratio.
52. Opening Inventory is Rs.30,000; Purchases Rs. 2,90,000; Revenue from
Operations, i.e., Net Sales Rs.4,00,000; Power Rs.20,000; fuel Rs.30,000;
Cartage Rs.60,000; Salaries & Wages Rs.29,000; Consumable stores Rs.40,000;
Gross Profit 25% on Sales. Calculate Inventory Turnover Ratio.
53. Opening Inventory Rs.42,000; Closing Inventory Rs.38,000; Revenue from
Operations (Net Sales) Rs.6,00,000; Gross Profit 25% on cost. Calculate
Inventory Turnover Ratio.
54. From the following information, calculate Inventory Turnover Ratio: Net Sales
Rs.6,00,000; Average Inventory Rs. 33,000; Gross Loss on Sales is 10%.
55. From the following information, calculate Inventory Turnover Ratio: -
Particulars (Rs.)
Purchases 6,20,000
Manufacturing Expenses 20,000
Trade Expenses 35,000
Revenue from Operations (Sales) 5,00,000
Opening Inventory 70,000
Gross Loss 20% on Revenue from Operations
56. From the following information, calculate Inventory Turnover Ratio: Total Sales
Rs.4,30,000; Sales Return Rs.30,000; Gross Profit 25% on cost; Closing
Inventory Rs. 44,000; Excess of Closing Inventory over Opening Inventory
Rs.36,000.
57. Cash Revenue from Operations Rs.1,20,000; Credit Revenue from Operations
Rs.1,80,000; Gross Profit 20% on Revenue from Operations; Inventory Turnover
Ratio = 2 Times.
Calculate Opening Inventory and Closing Inventory in each of the following
cases:
Case 1: If Opening Inventory is 1/4th of the inventory at the end.

Case 2: If Closing Inventory is 40% less than the inventory in the beginning.
Case 3: If Opening Inventory is 1/3rd of Closing Inventory and Closing
Inventory is 20% of Revenue from Operations.
Case 4: Closing Inventory was 3 times the Opening Inventory.
Case 5: Closing Inventory was 3 times more than the Opening Inventory.
Case 6: Closing Inventory is Rs 20,000 more than opening Inventory
58. You are given the following information: -
(i) Stock Turnover ; 4 times
(ii) Stock at the end is Rs.20,000 more than the stock in the beginning.
(iii) Sales Rs.3,00,000.
(iv) Gross Profit Ratio 25%
(v) Current Liabilities Rs.40,000
(vi) Quick Ratio 0.75
Calculate (i) Cost of Revenue from Operations, (ii) Opening Inventory and
Closing inventory, and (iii) Quick Assets and Current Assets.
59. Calculate the current assets of a company from the following information: -
(i) Stock Turnover Ratio 6 times
(ii) Stock in the beginning is Rs. 8,000 more than stock at the end
(iii) Sales Rs.2,16,000
(iv) Gross Profit 20% on cost
(v) Current Liabilities Rs.80,000
(vi) Acid Test Ratio 0.75:1.
Calculate (i) Cost of Revenue from Operations, (ii) Opening Inventory and
Closing inventory, and (iii) Quick Assets and Current Assets.

60. If Opening Inventory is 1/3rd of Closing Inventory and Closing Inventory is 20%
of Revenue from Operations. If revenue from Operations is Rs 6,00,000 and GP
Ratio on cost is 25%.
61. From the following information obtained from the books of Kundan Ltd.,
calculate the inventory turnover ratio for the years 2015-16 and 2016-17 :
Particulars 2015-16(Rs.) 2016-17 (Rs.)

Inventory on 31st March 7,00,000 17,00,000
(Gross profit is 25% on cost of revenue from operations) In

the year 2015-16, inventory increased by Rs.2,00,000.
62. Following is the Statement of Profit and Loss of Exe Ltd., calculate Inventory
Turnover Ratio:
for the year ended 31st March, 2018
Particulars Note No. (Rs.)

I. Revenue from Operations 4,00,000
II. Expenses:
Purchases of Stock-in-Trade 2,20,000
Change in Inventory of Stock-in-Trade 1 60,000
Other Expenses 2 50,000
Total Expenses 3,30,000
III. Profit before Tax (I-II) 70,000

IV. Tax 35,000
V. Profit after Tax (III - IV) 35,000

Notes to Accounts:
Particulars (Rs.)
1. Change in Inventory of Stock-in-Trade
Less: Closing Inventory 30,000
60,000
2. Other Expenses
Carriage Inwards 20,000
Carriage Outwards 18,000
Miscellaneous Expenses 12,000
50,000
63. From the following Statement of Profit and Loss of Edumission Ltd., calculate
Inventory Turnover Ratio:
II. Other Income 45,000
III. Total Revenue (I + II) 30,45,000
IV. Expenses:
Cost of Materials Consumed 1 5,20,000
Changes in Inventories of Finished Goods and 2 (20,000)
Work-in-Progress
Employees Benefit Expenses 3 2,00,000
Depreciation and Amortisation 75,000
Other Expenses 4 2,20,000
V. Profit before Tax (III - IV) 20,50,000

Notes to Accounts:
Particulars (Rs.)
1. Cost of Materials Consumed
Opening Inventory of Materials 20,000
Add: Purchases of Materials 5,80,000
6,00,000
Less: Closing Inventory of Materials 80,000
5,20,000
2. Changes in Inventories of Finished Goods and WIP
Work-in-Progress:
(20,000)
3. Employee Benefit Expenses
Wages 30,000
Salaries 1,70,000
2,00,000
4. Other Expenses
Carriage 70,000
Advertisement 1,50,000
2,20,000

64. Calculate (i) Inventory Turnover Ratio and (ii) Average Age of Inventory from the
following: -
Statement of Profit & Loss
I. Revenue from Operations (Sales) 6,00,000
II. Expenses
(a) Purchase of Stock in Trade 2,10,000
(b) Change in Inventories of Stock, in Trade 1 (20,000)
(c) Employee Benefit Exp. 2 72,000
(d) Other Expenses 3 68,000
Total Expenses
3,30,000
III. Profit before Tax (1 -11) 2,70,000
Notes to Accounts:
(1) Change in Inventories of Stock in Trade (Rs.)
(20,000)
(2) Employee Benefit Expenses:
Wages & Salaries 50,000
Staff Welfare Expenses 22,000
72,000
(3) Other Expenses:
Manufacturing Expenses 30,000
Freight Inwards 20,000
Miscellaneous Expenses 18,000
68,000

65. Calculate Inventory Turnover Ratio from the following information: Opening
Inventory Rs. 40,000; Purchases Rs. 1,60,000 and Closing Inventory Rs.20,000.
State giving reason, which of the following transactions would (i) increase, (ii)
decrease, and (iii) neither increase nor decrease the Inventory Turnover Ratio:
(a) Sale of goods for Rs.12,000 (Cost Rs.10,000).
(b) Increase in the value of Closing Inventory by Rs.20,000.
(c) Goods purchased for Rs.30,000.
(d) Purchases return Rs.10,000.
(e) Goods costing Rs.10,000 withdrawn for personal use.
(f) Goods costing Rs.10,000 given as charity.
(g) Payment of Carriage Inwards Rs.20,000
(h) Payment of Salaries Rs.20,000
(i) Sales Return Rs. 40,000(Cost Price Rs.30,000)
66. Calculate Inventory Turnover Ratio
Cash Sales 20% of Credit Sales; Credit Sales Rs.5,00,000; Gross Profit 20% on
Revenue from Operations, i.e., Net Sales; Closing Inventory Rs.70,000; Opening
Inventory Rs.90,000
67. Cash Sales 25% of Total Sales; Credit Sales Rs.6,00,000; Gross Profit 33 1/3 %
on Cost; Opening Inventory Rs. 1,20,000; Closing Inventory Rs.1,80,000.
Calculate Inventory Turnover ratio
TRADE RECEIVABLE TURNOVER RATIO
68.
Particulars (Rs.)
Credit Revenue from Operations, i.e., Net Credit Sales for the year 2,40,000
Debtors 24,000
Bills Receivable 16,000
Calculate Trade Receivables Turnover Ratio & Average Collection Period
assuming 360 days in a year.

69. Calculate Trade Receivables Turnover Ratio & Average Collection Period (In
months) from the following information:
31st March, 31st March,

Particulars
2017 (Rs.) 2018 (Rs.)
Sundry Debtors 21,000 24,000
Bills Receivable 19,000 16,000
Provision for Doubtful Debts 2,800 2,500
Revenue from operations (Gross) Rs.2,00,000; Return Inward Rs.5,000; Cash

Revenue From operations Rs.35,000.
70. Calculate Trade Receivables Turnover Ratio and Average Collection Period (in
no of days) from the following :-
Particulars (Rs.)
Total Revenue from Operations for the year (Total Sales) 6,00,000
Cash Revenue from Operations : being 20% of Credit
Revenue from Operations
Opening Trade Receivables 75,000
Excess of Closing Trade Receivables over Opening Trade 50,000
Receivables
71. Cost of Revenue from Operations or Cost Bof Goods Sold Rs.5,00,000; Gross
Profit on Cost 20%; Cash Sales 10% of Total Sales; Opening Trade Receivables
Rs.70,000; Closing Trade Receivables Rs.50,000. Calculate Trade Receivables
Turnover Ratio and Average Collection Period (in no of days)
72. Cost of Revenue from Operations or Cost of Goods Sold Rs.9,00,000; Gross
Profit on Sales 25%; Cash Sales 20% of Net Credit Sales, Opening Trade
Receivables Rs.80,000; Closing Trade Receivables Rs.1,20,000.
73. A Company made Credit Revenue from Operations of Rs.8,00,000 during the
year ended 31st March, 2020. If Trade Receivables Turnover Ratio is 2 times
calculate Opening & Closing Trade Receivable if :—
(i) if closing Trade Receivables are three times the opening Trade Receivables.
(ii) if closing Trade Receivables are three times more than the opening Trade
Receivables.
74. Calculate amount of Opening Trade Receivables and Closing Trade Receivables
from the following figures:
Trade Receivables Turnover Ratio 6 times
Cost of Revenue from Operations (Cost of Goods Sold) Rs. 8,00,000
1
Gross Profit Ratio 33 %
3
Closing Trade Receivables were Rs. 20,000 more than in the beginning.
Cash Sales being 25% of Credit Sales.
75. Calculate Debtors Turnover Ratio from the following information :
Particulars (Rs.)
Credit Sales 4,30,000
Cash Received from Debtors 4,00,000
Discount Allowed 20,000
Sales Returns 10,000
Opening Debtors 40,000
Bad Debts 20,000
76. A firm normally has debtors equal to four month’s credit sales. During the
coming year it expects credit sales of Rs. 6,00,000 spread evenly over the year
(12 months). What is the estimated amount of opening & closing Trade
Receivable if Closing Trade Receivable is Rs 10,000 more than the beginning.

77. Amaze company made Credit Sales of Rs.6,00,000 during the year 2019-20. If
the collection period is 60 days and year is assumed to be 360 days, calculate:
(i) Trade Receivables Turnover Ratio;
(ii) Average Trade Receivables;
(iii) Trade Receivables at the end when Trade Receivables at the end are more
than that in the beginning by Rs.40,000.
TRADE PAYABLE TURNOVER RATIO
78. Calculate Trade Payables Turnover Ratio and Average Payment Period (in
months) from the following :
Particulars (Rs.)
Total Purchases 25,00,000
Cash Purchases 80,000
Purchases Returns (out of credit purchases) 20,000
Opening Balance of Creditors 2,40,000
Opening Balance of Bills Payables 60,000
Closing Balance of Creditors 3,80,000
Closing Balance of Bills Payables 1,20,000
79. Calculate Trade Payables Turnover Ratio and Average Payment Period
(assuming 360 days in a year) from the following:
Closing Trade Payables Rs.50,000; Net Purchases Rs.6,70,000; Purchases Return
Rs. 1,00,000; Cash Purchases Rs.70,000.
80. Closing Trade Payables Rs.60,000; Closing trade payables were Rs.20,000 more
than that in the beginning; Net Credit Purchases (including Rs.50,000 of
Purchase of Machinery) Rs.6,00,000; Purchases Return Rs.50,000; Cash
Purchases Rs.50,000.

WORKING CAPITAL TURNOVER RATIO:
81. From the following information, calculate Working Capital Turnover Ratio:
Particulars (Rs.)
Cash Revenue from Operations 20,00,000
Credit Revenue from Operations (Gross) 32,00,000
Returns Inward 2,00,000
82. Gross Profit at 20% on cost; Gross Profit Rs. 4,00,000; Equity Share Capital Rs.
8,00,000; 10% Preference Share Capital Rs 4,00,000; Reserves and Surplus Rs.
3,00,000; Debentures Rs. 5,00,000; Fixed Assets (Net) Rs. 12,00,000, Non
Current Investments Rs 4,00,000. Calculate Working Capital Turnover Ratio.
83. Capital Employed Rs.10,00,000; Net Fixed Assets Rs.5,00,000; Non Current
Investments Rs. 4,00,000; Revenue from Operations Rs.20,00,000; Gross Profit
is 25% on Cost. Calculate Working Capital Turnover Ratio.
84. Calculate Working Capital Turnover Ratio from the following information:
Cost of Revenue from Operations Rs.30,00,000; Non Current Liabilities
Rs.12,00,000; Total Debt Rs.15,00,000; Total Assets Rs.20,00,000; Non current
Assets Rs.13,00,000,
PROFITABILITY RATIOS
85. The firm is of the opinion that its manager is working very efficiently as both
RFO & Gross Profit has increased due to his efforts. Comment on the following:
31st March, 31st March, 2020

Particulars
2019 (Rs.) (Rs.)
Revenue from Operations (Net Sales) 2,00,000 3,00,000
Gross Profit 40,000 54,000

86. Compute Gross Profit Ratio from the following information: Revenue from
Operations Rs. 12,00,000; Gross Profit 25% on Cost.
87. Calculate Gross Profit Ratio from the following information:
Cash Sales are 20% of Total Sales; Cash Purchases was 25% of credit
Purchases; Cash Purchases Rs.2,05,000; Return Outwards Rs.20,000; Credit
Sales Rs.8,00,000; Excess of Closing Inventory over Opening Inventory
Rs.1,00,000.
88. Following information is available for the year, calculate Gross Profit Ratio:
Cash Sales 22,000 Decrease in Inventory 20,000
Purchase: Cash 10,000 Return Outward 1,000
Credit 50,000 Factory fuel & Power 11,000
Return Inwards 12,000 Ratio of Cash Sales and 1:5
Advertisement 19,000 Credit Sales
89. Closing Inventory Rs.5,00,000. Excess of Closing Inventory over Opening

Inventory Rs.2,00,000. Inventory Turnover Ratio 6 Times. Sale price is 20%
above cost. Calculate Gross Profit Ratio.
90. Calculate Gross Profit Ratio from the following data:
Opening Inventory Rs.3,00,000. Excess of Closing Inventory over Opening
Inventory Rs.1,00,000; Inventory Turnover Ratio 5 Times; Closing Trade
Receivables Rs.2,50,000; Trade Receivables Turnover Ratio 4 Times; Cash
Sales 20% of Net Sales.

OPERATING & OPERATING PROFIT RATIO
91. From the following information, calculate Operating Ratio & Operating Profit
Ratio:
Particulars (Rs.)
Cost of Revenue from Operations (Cost of Goods Sold) 2,00,000

Revenue from Operations 4,00,000
Operating Expenses 1,00,000
92. From the following information, calculate Operating Ratio & Operating Profit
Ratio:
Revenue from Operations Rs. 6,80,000; Rate of Gross Profit on Cost 25%;
Selling Expenses Rs. 1,44,000; Administrative Expenses Rs. 73,000.
(Delhi 2016)
93. Calculate Operating Ratio & Operating Ratio from the following information:
Particualrs (Rs.)
Net Revenue from Operations 20,00,000
Bad Debts 1,00,000
Gross Profit Ratio 20%
Office & Administration Expenses 50,000
Depreciation 50,000
Loss on Sale of Plant 80,000

94. From the following Statement of Profit and Loss Compute Operating
Profit Ratio :
1. Revenue from Operations (Sales) 20,00,000
II. Add: Other Incomes 1 20,000
III. Total Revenue I + II 20,20,000
IV. Less : Expenses
Purchase of Stock-in-Trade 5,00,000
Changes in Inventories of Stock in Trade (50,000)
Employee Benefit Expenses 40,000
Finance Costs 20,000
Depreciation and Amortization Expenses 90,000
Other Expenses 3 1,00,000
V. Profit before Tax (III - IV) 13,20,000

Notes to Accounts :
Note No Particulars (Rs.)
1 Other Incomes 5,000

Interest Received 15,000
Dividend Received 20,000
2 Employee Benefit Expenses
Salaries 40,000
3. Other Expenses : 40,000
Administrative Expenses 40,000
Selling Expenses 10,000
Loss on Sale of Machinery 50,000
1,00,000
95. Calculate Operating Profit from the following information

Particulars (Rs.)
Cash Revenue from Operations (Cash Sales) 1,00,000
Net Purchases 2,97,000
Credit Revenue from Operations (Credit Sales) 3,00,000
Carriage Inward 3,000
Finance Cost 5,000
Administrative Expenses 40,000
Profit on Sale of Fixed Assets 10,000
Discount Received 7,000
(I.S.C. Sample Paper, 2017)

96. From the following calculate
(a) Net Profit Ratio
(b) Operating Profit Ratio
S.No. Items (Rs.)
1. Revenue from Operations (Sales) 2,00,000
2. Gross Profit 75,000
3. Office Expenses 15,000
4. Selling Expenses 26,000
5. Interest on Debentures 5,000
6. Accidental losses 12,000
7. Income from Rent 2,500
8. Commission received 2,000
(From C.B.S.E. Guidance Notes)
97. Net Sales Rs.6,00,000, Purchases Rs.80,000, Cost of goods sold Rs.4,00,000,
Office & Administrative Expenses Rs.30,000, Selling & Distribution Expenses
Rs.50,000, Sales Returns Rs.20,000. Interest on Debentures Rs.20,000. Profit on
sale of Land & Building Rs.20,000, Provision for Tax 50% Calculate Net Profit
Ratio.
98. Cash Sales Rs.4,20,000, Credit Sales Rs.6,00,000, Sales Returns Rs.20,000,
Gross Profit Rs.2,00,000, operating Expenses Rs 40,000. Non-Operating incomes
Rs 60,000, Non-Operating Expenses Rs 50,000. Calculate Net profit Ratio.
99. Calculate Net Profit Ratio from the following information :
Revenue from Operations (Sales) Rs.40,00,000; Gross Profit Ratio 15%;
Operating Ratio 90%; Non-Operating Expenses Rs.90,000; Non-operating
Income Rs.1,10,000.
100. Gross Profit Ratio of a company was 20%. Its cash sales were Rs. 4,00,000 and
credit sales were 80% of the total sales. If the indirect expenses of the company
were 1,00,000, Tax rate was 40 %. calculate Net Profit Ratio.

101. Calculate Net Profit Ratio from the following statement of profit and loss of new
delhi sales Ltd. for the year ended 31st March, 2013:
Particular (Rs.)
I. Revenue from operations (Net Sales) 12,50,000

II. Expenses:
Purchases of stock –in-trade 8,00,000
Changes in inventories of stock-in-trade (20,000)
Employees benefit expenses 1,20,000
Finance cost 25,000
Depreciation and amortization 35,000
Other Expenses 40,000
III. Net Profit (I – II) 2,50,000

Less: Tax @20% 50,000
Net Profit after Tax 2,00,000
Note:
Particular (Rs.)
1. OTHER EXPENSES 5,000

Advertisement 10,000
Carriage 25,000
Administrative and General Expenses 40,000

102. From the following figures pertaining to two companies Edumission Ltd. and
EJU’S Ltd., belonging to plastic industry. Calculate the Gross Profit Ratio of the
two companies. Which company is doing better?
EDUMISSION EJU’S Ltd.

Particulars
(Rs.) (Rs.)
Net Profit after Interest 90,000 60,000
Operating Expenses 20,000 12,000
Interest Paid on Debentures 10,000 28,000
Revenue from Operations (Gross) (Sales) 4,20,000 1,20,000
Revenue from Operations Return (Sales 20,000 20,000
Returns)
103. The operating ratio of a company is 60% & The Gross Profit Ratio & Net Profit
ratio of a company is 20% & 10% respectively. State giving reason, which of the
following transactions will (a) increase, (b) decrease, or (c) not alter the
operating ratio, Gross profit ratio & net Profit ratio.
1. Purchase of goods Rs.20,000.
2. Purchase returns Rs.5,000
3. Revenue from Operations Rs.50,000
4. Loss on sale of Machinery Rs.10,000.
5. Goods costing Rs. 20,000 withdrawn distributed as free samples.
6. Increase in Selling expenses by Rs.10,000.
7. Sale of Building Book value Rs.40,000 for Rs.50,000
8. Revenue from Operations returns Rs.8,000
(Assume that Operating Cost is variable, i.e., varies by the same percentage as
Sales.)

RETURN ON INVESTMENT & INTEREST COVERAGE RATIO
104. Net Profit before Interest and Tax Rs.2,50,000,. Capital Employed Rs.10,00,000.
Calculate Return on Investment.
105. Net Profit after Interest but before Tax Rs.1,40,000, 12% Long-term Debt
Rs.5,00,000, Shareholders Funds Rs.2,00,000. Tax Rate 50%. Calculate Return
on Investment & Interest coverage ratio.
106. Net Profit after Interest but before Tax Rs 80,000, Net Fixed Assets Rs. 2,00,000,
Non Current Investments Rs.80,000, Current Assets Rs.40,000,Current
Liabilities Rs.20,000, 10% long Term Loan Rs.2,00,000. Calculate, Return on
Investment, Interest Coverage Ratio.
107. Net Profit after Tax Rs.3,60,000, 12% Long-term Loan Rs.5,00,000, Equity
Share Capital Rs.3,00,000, 10% Preference Share Capital Rs.4,00,000, 15%
Debentures Rs.4,00,000, Tax Rate 40%. Calculate Return on Investment, Interest
Coverage Ratio.
108. Net Profit after Tax Rs.2,40,000, 12% Long-term Loan Rs.5,00,000, Net Fixed
Assets Rs.3,00,000, Non Current Investments Rs.4,00,000, Current Assets
Rs.1,50,000, Current Liabilities Rs.30,000 , 10% Debentures Rs.2,00,000, Tax
Rate 20%. Calculate Return on Investment, Interest Coverage Ratio.
109. Calculate Return on Investment & Interest Coverage Ratio from the following
information:
Net Profit after Preference Dividend : Rs 11,50,000; 8% Convertible Debentures:
Rs.25,00,000; Income Tax : 40%; Fixed Assets at cost : Rs.61,00,000;
Depreciation Reserve Rs.1,00,000; Current Assets: Rs.9,00,000; Current
Liabilities: Rs.4,00,000, 10% Preference Share Capital Rs.5,00,000
110. A company has a loan of Rs.10,00,000 and Rs.30,00,000 equity share capital as
its capital employed. The interest payable on loan is 10% and the ROI of the
company is 20%. The rate of income tax is 50%. Calculate the amount available
to the equity shareholders due to the loan raised by the company?

111. Following is the Balance Sheet of Vishesh India Ltd as at 31st March, 2020:
I. Equity and Liabilities

1. Shareholder’s Funds 7,00,000
(a) Share Capital
(b) Reserves and Surplus:
Surplus, i.e. balance in Statement of profit and loss:
Previous year Balance Rs. 1,80,000
Add: Current year Rs. 1,20,000 3,00,000
10% Long-term Borrowing 2,00,000
3. Current Liabilities 3,00,000
Total
15,00,000
II. Assets
1. Non-Current Assets 5,00,000
(a) Fixed Assets 2,00,000
(b) Non-Current Investment
(i) 10% Investment 4,00,000
(ii) 5% Non-trade Investment 4,00,000
2. Current Assets
Total 15,00,000
You are required to calculate Return on Investment for the year ended 31st
March, if Net Profit after Tax was Rs.1,20,000 & rate of Tax was 40% .

112. State, with reason, whether the following transactions will increase, decrease or
not change the 'Return on Investment' Ratio if the Net Profit Before Interest &
Tax was Rs 3,00,000 & Capital Employed was Rs 12,00,000:
(a) Purchase of Building of Rs. 3,00,000 by issue of Debentures.
(b) Redemption of debentures by converting them into Equity shares 3,00,000.
(c) Purchase of Machinery Rs 2,00,000.
(d) Raising Bank Loan Rs 3,00,000
(e) Purchase of Goods for Cash Rs 6,00,000

Answers & Solution
1. Current Ratio = 2:5:1 7. Current Liabilities = 4,00,000

Liquid Ratio = 1:5:1 Current Assets = 12,00,000
2. Current Ratio = 1:1 Quick Assets = 6,00,000

Quick Ratio = 0.5:1 8. Current Liabilities = Rs.2,00,000
3. Current Ratio = 2.8:1 Working Capital = Rs.2,00,000

Quick Ratio = 1.9:1 9. Inventories = Rs.1,00,000
Working Capital = 1,90,0000 10. Rs.2,00,000
4. Current Liabilities = 1,20,000 11. Current Ratio = 1.33:1
Current Asset = 2,40,000 Quick Ratio = 1.1:1
5. Current Ratio: 2.2:1
12. Current Ratio = 1.5:1
6. Current Ratio = 1.25:1
Liquid Ratio = 1.33:1
Quick Ratio = 0.66:1
13. Current Liabilities = 8,00,000

14. Inventory = Rs.2,00,000
15. Current Liabilities = Rs.2,00,000
16. Before
Current Liabilities = Rs.2,50,000
Working Capital = Rs.1,50,000
After
Current Liabilities = Rs.1,50,000
Working Capital = Rs.1,50,000
17. Current Liabilities(Before) = Rs.1,00,000
Current Liabilities(After) = Rs.2,00,000

18.
Particulars Current Ratio Liquid Ratio
1. Cash collected from debtors No Change No Change
2. B/R received from trade receivables or B/R
No Change No Change
drawn
3. Sale of goods on cost No Change Improve
4. Sale of Inventories cost Rs 50,000 for Rs
Improve Improve
60,000
5. Sale of Inventories cost Rs 50,000 for Rs
Decline Improve
40,000.
6. Purchase of stock for cash. No Change Decline
7. Purchase of stock on credit. Decline Decline
8. Sale of a fixed asset on a credit of 2 months Improve Improve
9. B/R dishonoured No Change Improve
10. B/R endorsed to trade payables Improve Improve
11. Sale of a fixed asset on long-term deferred
No Change No Change
payment basis
12. Purchase of a fixed asset for cash Decline Decline
13. Repayment of a, Long term Loan Decline Decline
14. Conversion of a Debentures into equity
No Effect No Effect
shares.
15. Issue of new Shares/Debentures for cash Improve Improve
16. Issue of new Shares/Debentures against
No Change No Change
purchase of Machinery.
17. Purchase of a fixed asset on a credit of 2
Decline Decline
months.
18. Purchase of a fixed asset on long-term
No Effect No Change
deferred payment basis
19. Cash paid to Trade Payables or Cheque Improve Improve

issued against a B/P.
20. B/P given to trade payables. No Change No Change
21. Trade Receivables include debtors of Rs. No Change No Change
40,000 which were received in cash.
22. Company purchased furniture of Rs. No Change No Change
1,00,000. The vendor was paid by issue of
equity shares of Rs. 10 each at par.
23. Redeemed 9% Debentures with a maturity Improve Improve
period of 8 months of Rs. 1,00,000.
24. Purchase of Loose Tools against cash. Decline Decline
25. Issue of bonus shares No Change No Change
26. Sale of Loose tools for cash Improve Improve
27. Payment of Salaries in advance by cheque No Change Decline
28. Payment of Dividend Decline Decline
29. Discounted a bills receivable of Rs.20,000 Decline Decline
from bank. Bank charged discount of Rs.500
30. Sale of Marketable securities at par No Change No Change
31. Sale of Marketable securities at profit Improve Improve
19. Current Ratio = 2:1 25. Debit Equity Ratio = 0.75:1

26. Debit Equity Ratio = 0.75:1
20. Current Ratio = 2:1
27. Debit Equity Ratio = 0.5:1
21. Current Ratio = 3:1 28. Debit Equity Ratio = 2:1.
Liquid Ratio = 2.5:1 29. Debit Equity Ratio = 2:1
22. Current Ratio = 3:1 30. Debit Equity Ratio = 0.5:1
23. Quick Ratio = 2:1 31. Debit Equity Ratio = 0.25:1.
24. Current Ratio = 2:1.

32.
(i) Issue of new shares (Preference/Equity) for Cash. Decline
(ii) Cash received from Debtors No Change
(iii) Purchased goods on credit No Change
(iv) Issue of new shares (Preference/Equity) against purchase of Decline
fixed asset
(v) Buy-back of its own shares by a Company. Improve
(vi) Payment to creditors No Change
(vii) Repayment of Long term Borrowings. Decline
(viii) Sale of a fixed asset at par. No Change
(ix) Sale of a fixed asset at loss. Improve
(x) Sale of a fixed asset at profit Decline
(xi) Conversion of Debentures into Equity Shares Decline
(xii) Issue of Debentures for Cash. Improve
(xiii) Issue of Debentures against purchase of fixed asset. Improve
(xiv) Purchase of a fixed asset on long-term deferred payment basis Improve
(xv) Purchase of a fixed asset on a credit of 2 months. No Change
(xvi) Payment of dividend Improve
(xvii) Long term loan raised from bank Increase
(xviii) Issue of Bonus Shares. No Change

33. Debit Equity Ratio = 1:1 Proprietary Ratio = 0.625:1
34. Debit Equity Ratio = 0.67:1 42. Total Assets to Debt = 3:1
35. Debit Equity Ratio = 1:1 Proprietary Ratio = 0.5
36. Debit Equity Ratio = 0.5:1 43. Total Assets to Debt = 7:1
37. Debit Equity Ratio = 2:1 Proprietary Ratio = 0.57:1
38. Total Assets to Debt = 4:1 44. Total Assets to Debt = 3.33:1.
39. Proprietary Ratio = 0.305:1. 45. Total Assets to Debt = 3:1.
40. Proprietary Ratio = 0.60:1.
46. Debt Equity = 0.5:1
41. Total Assets to Debt = 3.2:1
Total Assets to Debt = 4:1
47.
(i) Obtained a loan of Rs.5,00,000 payable after ten years Decrease
(ii) Purchased building of Rs.2,00,000 by cheque No Change
(iii) Redeemed debentures Rs. 1,00,000 Increase
(iv) Issued equity shares Rs. 1,00,000 at a premium of Rs.1,00,000 Increase
(v) Conversion of debentures into preference shares Rs.4,00,000 Increase
(vi) Buy-back of its own shares by a company Rs.2,00,000. Decrease
(vii) Purchase of a fixed asset for cash Rs.1,00,000. No Change
(viii) Purchase of a fixed asset on long-term deferred payment basis
Decrease
Rs.2,00,000
(ix) Sale of a fixed asset costing Rs.1,00,000 for Rs.80,000 Increase
(x) Sale of a fixed asset costing Rs.2,00,000 for Rs.2,50,000 Increase
(xi) Issue of Bonus Shares Rs.1,00,000 No Change
48. Inventory Turnover = 3.2
49. Inventory Turnover = 4.28.
50. Inventory Turnover = 4.61.
51. Inventory Turnover Ratio = 8
52. Inventory Turnover Ratio = 3.

53. Inventory Turnover Ratio = 12.
54. Inventory Turnover Ratio = 20
55. Inventory Turnover Ratio = 6.67.
56. COGS = 3,20,000
57. 1. Closing Inventory = 1, 92,000
2. Closing Inventory = 90,000
3. Closing Inventory = 20,000
4. Closing Inventory = 1,80,000
5. Opening Inventory = 48,000
6. Closing Inventory = 1,30,000
59. Current Assets = 86,000
60. Inventory Turnover Ratio = 6 Times
62. 5 Times.
63. Inventory Turnover Ratio = 6 Times.
64. Inventory Turnover Ratio = 5.8 Times.
65.
(a) Sale of goods for Rs. 12,000 (Cost Rs.10,000). Improve
(b) Increase in the value of Closing Inventory by Rs.20,000. Decline
(c) Goods purchased for Rs.30,000. Decline
(d) Purchases return Rs.10,000. Decline
(e) Goods costing Rs. 10,000 withdrawn for personal use. Improve
(f) Goods costing Rs.10,000 given as charity Improve
(g) Payment of Carriage Inwards Rs.20,000 Decline
(h) Payment of Salaries Rs.20,000 No Change

(i) Sales Return Rs.40,000(Cost Price Rs.30,000) Decline

68. Average Collection = 60 Days
69. Average Collection = 3 Months
72. Average Trade Receivable = 1,00,000
73. (i) Opening Trade Receivables = 2,00,000
Closing Trade Receivables = 6,00,000
(ii) Opening Trade Receivables = 1,60,000
74. Opening Trade Receivables = 1,50,000
75. Inventory Turnover Ratio = 14 Times.
76. Closing Trade Receivables = 2,05,000
77. (i) 6 Times
(ii) 1,00,000
(iii) Opening Trade Receivables = 80,000
Also state the effect of the following on Trade Receivable Turnover Ratio:
(i) Cash Revenue from operations Rs.50,000
(ii) Credit sales of Rs.60,000
(iii) Bad Debts of Rs.20,000
(iv) Cash Received from Debtors Rs.20,000
(v) Returns Inward Rs.60,000

(vi) Credit Purchase of Goods Rs.45,000
(vii) Discount allowed to Debtors Rs.40,000
(i) Cash Revenue from operations Rs.50,000 No Change

(ii) Credit sales of Rs.60,000 Decline
(iii) Bad Debts of Rs.20,000 Improve
(iv) Cash Received from Debtors Rs.20,000 Improve
(v) Returns Inward Rs.60,000 Improve
(vi) Credit Purchase of Goods Rs.45,000 No Change
(vii) Discount allowed to Debtors Rs.40,000 Improve
78. Average Payment Period = 2 Months

79. Average Payment Period = 30 Days
80. Average Trade = 50,000
81. Revenue From Operations = 50,00,000
82. Working Capital Turnover Ratio = 6 Times
83. Working Capital Turnover Ratio = 20 Times
84. Working Capital Turnover Ratio = 7.5 Times
85. Gross Profit Ratio = 18%
87. Gross Profit Ratio =10%
89. Gross Profit Ratio = 16.67%
91. Operating Ratio = 75%

Operating Profit Ratio = 25%

92. Gross profit=1,70,000.
94. Net Profit = 13,70,000
95. Operating Profit Ratio = 16.75%
96. Net Profit Ratio = 10.75%
97. Net Profit Ratio = 10%
98. 20%
Net Profit Ratio = 17%
99. Net Profit Ratio = 10.3%
100. Net Profit Ratio = 9%
101. Net Profit Ratio = 16%.
102. EDU = 30%, EJU’S = 100%
103.
Operating Gross Profit Net Profit

Particulars
Ratio Ratio Ratio
1. Purchase of goods Rs.20,000 No Change No Change No Change
2. Purchase returns Rs.5,000 No Change No Change No Change
3. Revenue from Operations Rs.50,000 No Change Decrease Decrease
4. Loss on sale of Machinery No Change No Change Decrease
Rs.10,000.
5. Goods costing Rs.20,000 withdrawn Increase No Change Decrease
distributed as free samples.
6. Increase in Selling expenses by Increase No Change Decrease
Rs.10,000
7. Sale of Building Book value No Change No Change Increase
Rs.40,000 for Rs.50,000
8. Revenue from Operations returns No Change Increase Increase
Rs.8,000

104. Return on Investment = 25%
105. Return on Investment = 28.57%
Interest Coverage Ratio = 3.33%
Interest Coverage Ratio = 5 Times
Interest Coverage Ratio = 4.75 Times
110. Income to Equity = 3,50,000
111. Return on Investment = 29.41%.
112.
(a) Purchase of Building of Rs.3,00,000 by issue of Debentures. Decline
(b) Redemption of debentures by converting them into Equity No Change
shares 3,00,000.
(c) Purchase of Machinery Rs.2,00,000. No Change
(d) Raising Bank Loan Rs.3,00,000 Decline
(e) Purchase of Goods for Cash Rs.6,00,000 No Change

I am the Best  Cash Flow Statement |Class-XIIth
Chapter 5 Cash Flow Statement

1. Calculate “Cash Flow From Operating activities” from the following
information:
Particulars 2020 (Rs.) 2019 (Rs.)
Profit & Loss Appropriation 80,000 50,000
Provision for Depreciation 72,000 60,000
Outstanding Rent Payable 18,000 7,500
Prepaid Insurance 9,000 6,000
Goodwill 38,000 50,000
Stock 24,000 20,000
General Reserve 20,000 15,000
Cash in Hand 45,000 60,000
Bank Overdraft 70,000 50,000
2. Calculate ‘Cash Flow Operating activities’ from the following balances:
Debtors 40,000 70,000
Reserve 50,000 40,000
Stock 18,000 12,000
Creditors 20,000 30,000
Outstanding Expenses 3,000 2,500
Bills Payable 42,000 22,000
Profit & Loss A/c 40,000 50,000
Equity Share Capital 7,00,000 6,00,000
Debentures 3,00,000 2,00,000
Additional Information: Goodwill written off Rs.10,000.

3. Calculate Cash From Operations from the following:
(i) Profits made during the year Rs.4,00,000 after considering the following
items:
(Rs.)
(a) Depreciation on fixed Assets 20,000
(b) Amortization of Goodwill 9,000
(c) Transfer to General Reserve 5,000
(d) Profit on Sale of Land 5,000
(e) Received 3,000
(f) Rent Received 2,000
(g) Loss on sale of Non current Investments 12,000
(h) Premium on redemption of Debenture 8,000
(i) Discount on issue of Debentures written off 15,000
(ii) The Following is the position of Current Assets and Current Liabilities:
Debtors 15,000 10,000

Creditors 5,000 15,000
Prepaid Expenses 8,000 6,000
Land 2,50,000 2,00,000
Non Current Investments 70,000 40,000

4. From the following information calculate Cash Flow from Operating Activities:
Particulars (Rs.)

II. Other Income
profit on sale of furniture 20,000
Interest received 5,000 25,000
IV. Expenses:
(a) Purchases of Stock-in-trade 10,00,000
(b) Changes in Inventories of Stock-in-Trade 40,000
(c) Depreciation and Amortisation 52,000
(d) Other Expenses 4,00,000
V. Profit before Tax (III-IV) 5,33,000
VI. Less: Tax 53,000
VII. Profit after Tax 4,80,000
Note:
Other Expenses: (Rs.)
(i) Selling and Distribution Expenses 1,08,000
(ii) Office Expenses 1,92,000
(iii) Discount on Issue of Debentures Written off 40,000
(iv) Loss on Sale of Machinery 60,000
4,00,000

S.No. Particulars 31st march 2020 31st March 2019

1. Trade receivable 2,50,000 2,20,000
2. Inventories 1,30,000 1,70,000
3 Trade payables 60,000 1,00,000
4 Outstanding expenses 12,000 10,000
5 Goodwill 70,000 50,000
6 Machinery 3,00,000 2,00,000
5. From the following statement, calculate the Cash Generated from Operating
Activities:
Particulars Note No. Amount.(Rs.)

II. Other Income 1 28,000
III. Total Revenue 1,78,000
IV. Expenses :
Employee Benefit Expenses 16,000
Depreciation and Amortization Expenses 2 30,000
Other Expenses 3 42,000
Total Expenses 88,000
V. Profit before Tax (III - IV) 90,000
Less: Provision for Tax 36,000
Profit for the period 54,000

Notes :
1. Other Income : (Rs.)
Profit on Sale of Machinery 12,000
28,000
2. Depreciation and Amortization Expenses : (Rs.)
Depreciation on Machinery 12,000
Patents written off 18,000
30,000
3. Other Expenses :
Rent 19,000
Carriage Inward 11,000
Loss on Sale of Building 12,000
42,000
6. The Statement of Profit and Loss of JUDWAA Ltd. for the year ended 31 st
March, 2020 and additional information are given below. Calculate the Cash
Flow from Operating Activities:
Particulars Note No (Rs.)
IV. Expenses:
(b) Changes in Inventories of Stock-in-Trade
(Opening Inventories Rs. 60,000 and Closing (20,000)
Inventories Rs. 80,000)

(c) Employees Benefit Expenses 1,00,000
(d) Finance Cost 80,000
(e) Depreciation and Amortisation 2 20,000
(f) Other Expenses 2,00,000
3
V. Profit for the Year (III – IV) 15,80,000
Less: Tax 4,75,000
Profit after Tax 75,000
4,00,000
Notes:
1. Other Income (Rs.)
Rent 12,000
Refund of Tax 8,000
Insurance claim for Earthquake 20,000
50,0000
2. Other Expenses (Rs.)
Manufacturing expenses 29,000
Administration expenses 71,000
Selling & distribution Expenses 40,000
Loss on sale of Machine 60,000
2,00,000
3. Finance Cost (Rs.)
Interest Paid 60,000
Share Issue Expenses 20,000
80,000

S.No. Particulars 31st March 2020 31st march 2019
1 Rent payable 5,000 10,000
2. Salaries payable ….... 25,000
3 Inventory 60,000 80,000
4 Prepaid insurance 1,000 3,000
5 Accrued commission 12,000 7,000
7. Calculate Cash Flow Operating Activities from the following information by the
Indirect Method:
Particulars (Rs.)
Net Profit(After Provision for Tax Rs. 2,20,000 & Dividend) 12,00,000
Dividend paid for the Current Year 2,00,000
Compensation for Earthquake Disaster credited to 90,000
Statement of Profit and-Loss a/c
Depreciation 1,20,000
Loss on Sale of Machinery 40,000
Profit on Sale of Investments 25,000
Dividend Received on Investments 20,000
Decrease in Current Assets (Other than Cash and Cash 40,000
Equivalents)
Increase in Current Liabilities 2,50,000
Increase in Current Assets (Other than Cash and Cash 1,20,000
Equivalents)
Decrease in Current Liabilities 50,000
Income Tax Paid 1,20,000
Refund of Income Tax Received 10,000

8. The Statement of Profit and Loss of BHAVIK Ltd. for the year ended 31st March,
2020 and additional information are given below. Calculate the Cash Flow from
Operating Activities:
Statement of Profit And Loss
IV. Expenses:
(b) Changes in Inventories of Stock-in-Trade (Opening
Inventories Rs. 30,000 and Closing Inventories (60,000)
Rs.90,000)
(c) Employees Benefit Expenses 60,000
(d) Finance Cost 2 40,000
(e) Depreciation and Amortization 3 30,000
(f) Other Expenses 4 1,00,000
V. Profit for the Year (III – IV) 5,70,000
Less: Tax 5,00,000
Profit after Tax 2,00,000
3,00,000
1. Other Income (Rs.)

Rent Received 15,000
Profit on sale of Fixed Assets 5,000
Refund of Tax 12,000
Insurance Claim Received for loss of goods by fire 8,000
70,000

2. Finance Cost (Rs.)
Interest paid 12,000
Underwriting Commission 8,000
Premium/Loss on Redemption of Debentures 19,000
Share Issue Expenses 1,000
40,000
3. Depreciation & Amortization (Rs.)
Depreciation on Building 9,000
Goodwill Written off 11,000
Patents written off 10,000
30,000
4. Other Expenses (Rs.)
Advertisement 7,000
Bad Debts 12,000
Discount Allowed 21,000
Bank Charges 40,000
Loss: on Sale of Machine 20,000
1,00,000
S.No. Particulars 31st March 2020 31st march 2019

1 Outstanding Selling Expenses –– 10,000
2. Prepaid Advertisement Expenses …….. 15,000
3 Inventory 90,000 30,000
4 Trade Receivable 40,000 25,000
5 Trade Payables 41,000 61,000

9. JK earned a net profit after tax of Rs. 4,00,000 for the year ended 31 st March,
2020, The relevant items of balance sheet appeared as follows:
Trade Receivables 50,000 80,000
Trade Payables 5,000 20,000
Outstanding Expenses 5,000 1,000
Prepaid Expenses …… 4,000
Provision for Taxation 30,000 20,000
Depreciation charged on plant and machinery Rs.20,000, amortization of patents
was Rs.20,000, insurance proceeds from fire Rs.50,000, Income Tax paid
Rs.15,000 and gain on sale of Land Rs.10,000 appeared in the Statement of
Profit and Loss for the year ended 31st March, 2020.
You are required to determine the Cash from operating activities.
10. From the following information, calculation the Cash Flow Operating Activities:
Statement of Profit & Loss
Particulars (Rs.)
I. Revenue from Operations (Sales) 20,00,000
II. Expenses:
(b) Changes in Inventories of Stock-in-Trade (1,00,000)
(c) Employees Benefit Expenses 1,50,000
(d) Finance Cost 12,000
(e) Depreciation and Amortization 1,00,000
(f) Other Expenses 48,000
III. Net Profit (I – II) 11,10,000
IV. Less: Tax Expenses (Provision for Tax) 8,90,000
V. Profit after Tax (III-IV) 50,000
8,40,000
Other Expenses Includes Loss on sale of Machinery Rs.10,000

S.No. Particulars 1st April 2020 1st April 2019
1 Trade Receivable 90,000 1,20,000
2. Trade Payable 20,000 50,000
3 Accrued Income 15,000 -
4 Salaries outstanding - 10,000
5 Prepaid insurance 12,00 7,000
6 Provision for tax 30,000 20,000
11. From the following Balance Sheets of Vishnu Ltd, calculate the Cash flow from
Operating Activities:
31st March 31st March
Particular Note No.
2020(Rs.) 2019(Rs.)
1. Shareholders’ Funds
(a) Share Capital 1 3,50,000 2,50,000
(b) Reserves and Surplus 2 90,000 40,000
(a) Trade Payables 50,000 20,000
(b) Other Current Liabilities 70,000 50,000
(c) Short-term Provisions 3 90,000 40,000
Total 6,50,000 4,00,000

II. Assets
Fixed Assets – Tangible 4 2,50,000 1,00,000
– Intangible 5 60,000 80,000
2. Current Assets
(a) Current Investment 20,000 15,000
(Marketable Securities)
(b) Trade Receivables 70,000 65,000
(c) Inventories 1,20,000 70,000
(d) Cash and Cash Equivalents 1,30,000 70,000
Total 6,50,000 4,00,000
Note to Accounts:
Particulars
2020 (Rs.) 2019 (Rs.)
1. Share Capital
10% Preference Share Capital 1,50,000 1,00,000
3,50,000 2,50,000
2. Reserves and Surplus
Balance in Statement of Profit and Loss 40,000 30,000
90,000 40,000
3. Short-term Provision
Provision for Tax 90,000 40,000
90,000 40,000
4. Fixed Assets (Tangible)
Building 1,70,000 10,000
Plant 80,000 90,000
2,50,000 1,00,000
5. Goodwill (Intangible) 60,000 80,000

12. From the following information and Balance Sheets of Hollywood clothes as at
31st March, 2019 and 31st March, 2020, calculate Operation Profit before
Working Capital Changes.
Note 31st March 31st March

Particular
No. 2019(Rs.) 2020(Rs.)

(a) Share Capital 5,00,000 4,00,000
(b) Reserves and Surplus 1 6,70,000 4,00,000
(b) Other Current Liabilities 20,000 30,000
(outstanding Expenses)
(c) Short-term Provisions 80,000 70,000
(Provision for Tax)
Total 13,30,000 9,40,000
II. Assets
(a) Fixed Assets 7,00,000 6,30,000
(b) Non-current Investments 4,00,000 2,00,000
2. Current Assets 2,30,000 1,10,000
Total 13,30,000 11,55,000

Notes to Accounts:
31st March, 31st March
Particulars
2020 (Rs.) 2019(Rs.)
Statement of P & L A/c 3,30,000 2,00,000
General Reserve 3,40,000 2,00,000
6,70,000 4,00,000
Addition Information: Depreciation charged on Fixed Assets for the year was
Rs.50,000.
13. Calculate Cash Flows from Investing & Financing Activities:
31st March, 31st March

Particulars
2020 (Rs.) 2019(Rs.)

Land 80,000 1,00,000
Plant & Machinery 4,50,000 2,50,000
Bank Loan 6,00,000 8,00,000
Non Current Investments 1,50,000 2,50,000
Cash Credit 90,000 70,000
Bank Overdraft 2,00,000 1,50,000
Machinery 4,00,000 3,00,000
Debentures 1,80,000 80,000

FULL FLEDGED QUESTIONS
14. Following are the Balance Sheet of X Ltd. Prepare Cash Flow Statement:
Note 31st March, 31st March,

Particulars No. 2020 (Rs.) 2019 (Rs.)
I. Equity And Liabilities

(a) Share Capital 1 25,00,000 20,00,000
(b) Reserve and Surplus 2 2,30,000 1,00,000
2. Non Current Liability
(a) Long term Borrowings 3 2,00,000 1,00,000
(a) Trade Payables 4,50,000 7,00,000
Total 33,80,000 29,00,000
II. Assets
1. Non-Current Tangible
Fixed Assets
Tangible Assets 4 6,60,000 5,00,000
Intangible Assets 5 80,000 1,00,000
2. Current Assets
(a) Inventories 9,00,000 8,00,000
(c) Cash and Cash Equivalents 5,90,000 3,00,000
Total 33,80,000 29,00,000

Note to Accounts:

Particulars
2020 (Rs.) 2019 (Rs.)
1. Capital
8 % Preference share capital 1,00,000 2,00,000
25,00,000 20,00,000

Balance in Statement of Profit and Loss 2,00,000 80,000
2,30,000 1,00,000
3. Long Term Borrowings

Debentures 2,00,000 1,00,000
4. Assets
Land 1,50,000 2,00,000
Plant & Machinery 5,10,000 3,00,000
6,60,000 5,00,000
5. Assets
Goodwill 80,000 1,00,000
80,000 1,00,000

15. Prepare the Cash Flow Statement on the basis of the information given in the
Balance Sheets of NM Ltd. as at 31st March, 2020 and 31st March, 2019.

(a) Share Capital 1,80,000 1,00,000
Long-term Borrowings 2 80,000 1,00,000
(a) Trade Payable 3 1,10,000 50,000
(b) Other Current Liabilities 4 8,000 20,000
Total 5,48,000 3,70,000
II. Assets
1. Non-Current Assets:
(a) Fixed Assets:
(i) Tangible Assets 5 1,60,000 1,00,000
(ii) Intangible Assets 6 4,000 10,000
(b) Long-term Loan and Advance 1,10,000 80,000
2. Current Assets
(a) Inventories 70,000 60,000
(b) Trade Receivables 40,000 90,000
(c) Cash and Cash Equivalents 1,64,000 30,000
Total 5,48,000 3,70,000

Notes to accounts:

Particulars
2020(Rs.) 2019(Rs.)
1. Reserves & surplus

General Reserve 1,70,000 1,00,000
1,70,000 1,00,000
2. Long term borrowings

Loan from PNB 80,000 1,00,000
80,000 1,00,000
3. Trade Payables
Creditors 60,000 30,000
Bills Payable 50,000 20,000
1,10,000 50,000
4. Other current liabilities

outstanding expenses 8,000 20,000
5. Tangible Fixed Assets

Land Building 1,60,000 1,00,000
6. Intangible Fixed Assets

Goodwill 4,000 10,000

16. Prepare the Cash Flow Statement on the basis of the information given in the
Balance Sheets of JM Ltd. as at 31st March, 2020 and 31st March, 2019:


(a) Share Capital 2,50,000 2,00,000
Long-term Borrowings 2 1,00,000 80,000
(a) Short Term Borrowing 3 40,000 25,000
(b) Trade Payable 35,000 20,000
(c) Short Term Provisions 4 45,000 15,000
Total 6,50,000 4,90,000
II. Assets
(a) Fixed Assets:
(i) Tangible Assets 5 2,60,000 1,50,000
(ii) Intangible Assets 6 40,000 30,000
2. Current Assets
(a) Current Investments 90,000 60,000
(c) Cash and Cash Equivalents 1,40,000 1,40,000
Total 6,50,000 4,90,000

Notes to accounts:

Particulars
2020(Rs.) 2019(Rs.)
1. Reserves & surplus

Statement of P & L 1,80,000 1,50,000
1,80,000 1,50,000
2. Long term borrowings

1,00,000 80,000
10% Debentures
1,00,000 80,000
3. Short Term Borrowings

Bank Overdraft 40,000 25,000
40,000 25,000
4. Short Term Provision

45,000 15,000
Provision for Taxation
45,000 15,000
5. Tangible Fixed Assets

Land Building 2,60,000 1,50,000
6. Intangible Fixed Assets

25,000 20,000
Goodwill
15,000 10,000
Patents
40,000 30,000
Note: Debentures were issued on 1st April 2019.

17. From the following balance sheets of ABC Ltd, find out cash from operating
activities only:
Note 31-3-2020 31-3-2019

Particulars (Rs.) (Rs.)
No.
I. Equity and Liabilities:

Shareholder’s Funds:
Share Capital 60,000 50,000
Reserve and Surplus 1 28,000 14,000
Non-Current Liabilities
Long-term Borrowings 2 25,000 20,000
Current Liabilities
Trade Payables 15,000 10,000
Total 1,28,000 94,000
II. Assets:
Non-Current Assets:
Fixed Assets:
Tangible Assets 3 47,000 38,000
Intangible Assets 4 12,000 10,000
10% Non current Investments 8,000 5,000
Current Assets:
Inventory 50,000 10,000
Cash & Cash equivalents 11,000 25,000
Other Current Assets 5 …….. 6,000
Total 1,28,000 94,000

Note:

Particulars
2020(Rs.) 2019(Rs.)
1. Reserve & Surplus: 2020 2019

Profit & Loss Balance 5,000 (6,000)*
28,000 14,000
2. Long-term Borrowings:
10% Debentures 25,000 20,000
3. Tangible Assets:
Machinery 60,000 50,000
Less: Provision for Depreciation 13,000 12,000
47,000 38,000
4. Intangible Assets:
Goodwill 12,000 10,000
5. Other Current Assets:

Share Issue Expenses _____ 6,000
Additional Information:
Debentures were issued on 31.3.2020.
Investments were made on 1.4.2019.

18. Prepare a Cash Flow Statement on the basis of the information given in the
balance sheet of ABC Ltd. as at 31.03.2020 & 2019.
Note 31.03.2020 31.03.2019
Particulars
No. (Rs.) (Rs.)
I. EQUITY AND LIABILITIES: .

1. Shareholder’s Funds
(a) Share Capital 70,000 60,000
(a) Long-term Borrowings 2 50,000 20,000
(b) Short Term Provision 3 30,000 20,000
Total 2,19,000 1,38,000
II. ASSETS:
(a) Fixed Asset
(i) Tangible Assets 98,000 84,000
(b) Non-Current Investments 16,000 6,000
2. Current Assets
(a) Current investments 18,000 20,000
(b) Inventories 49,000 12,000
(c) Cash and Cash Equivalents 38,000 16,000
Total 2,19,000 1,38,000

Notes to Accounts:
Particulars
2020(Rs.) 2019(Rs.)
1. Reserve & Surplus:
Surplus i.e. Balance in Statement of Profit and Loss 14,000 (12,000)
44,000 8,000
2. Long term Borrowings
10% Debentures 50,000 20,000
3. Short Term Provision
Provision for Taxation 30,000 20,000
(i) Tax paid during the year was Rs 25,000.
(ii) Debentures were issued on 1st October 2019.
19. Following are the Balance Sheets of Edumission Ltd. as at 31.03.2020 and
31.03.2019:
Note. 31.3.2020 31.3.2021

Particulars
No. (Rs.) (Rs.)
1. Shareholder’s Funds:
(a) Share Capital 7,00,000 4,00,000
(b) Reserve & Surplus 1 (3,20,000) (50,000)
(a) Long-term Borrowings 2 3,00,000 4,00,000
(a) Trade Payables 1,50,000 1,10,000
(b) Other Current Liabilities 3 1,20,000 10,000
Total 9,50,000 9,50,000

II. ASSETS:
(a) Fixed Tangible Assets 4,50,000 4,00,000
(b) 10% Non-Current Investments 3,40,000 3,00,000
2. Current Assets:
(a) Inventory 30,000 50,000
(b) Trade Receivables 90,000 1,00,000
(c) Cash & Cash Equivalents 40,000 20,000
Total 9,50,000 9,50,000
Notes:

Particulars
2020(Rs.) 2019(Rs.)
1. Reserve & Surplus:
Profit & Loss Balance (3,20,000) (50,000)
2. Long-term Borrowings:
9% Debentures 3,00,000 4,00,000
3. Other Current Liabilities:
Outstanding Expenses 1,20,000 10,000
(i) During the year Rs.1,40,000 depreciation was charged on fixed tangible
assets.
(ii) Debentures were redeemed on 1st October 2019.
(iii) Investments were purchased on 31st March 2020.
Prepare of Cash Flow Statement.

20. From the following Balance Sheets of Yahoo Ltd. and the additional information
given, prepare the Cash Flow Statement:

Particular No. 2020(Rs.) 2019(Rs.)

(a) Share Capital:
(b) Reserves and Surplus 1 1,00,000 70,000
Long-term Borrowings 1,00,000 1,50,000
(b) Short-term Provision 2 1,00,000 80,000
Total 7,75,000 6,50,000
II. Assets
Fixed Assets – Tangible 3 3,70,000 2,80,000
Intangible(Goodwill) 80,000 1,15,000
2. Current Assets
(a) Inventories 85,000 50,000
(c) Cash and Cash Equivalents 4 10,000 25,000
Total 7,75,000 6,50,000

Note to Accounts:
Particulars
2020 (Rs.) 2019 (Rs.)
Balance in Statement of Profit and Loss 40,000 30,000
1,00,000 70,000
2. Short-Term Provisions
Provision for Tax 1,00,000 80,000
3. Fixed Assets
Land and Building 1,70,000 2,00,000
Plant 2,00,000 80,000
3,70,000 2,80,000
4. Cash and Cash Equivalents
Cash in Hand 4,000 15,000
Cash at Bank 6,000 10,000
10,000 25,000
Note:
Dividend proposed for the years ended 31st March, 2019 and 2020 are Rs 60,000
and Rs.80,000 respectively
i. Depreciation of Rs.10,000 and Rs. 20,000 has been charged on Plant and
Building respectively in 2020.
ii. Income Tax of Rs. 45,000 was paid during the year 2019-20.

21. From the following information calculate Cash Flows from Investing Activities
by preparing appropriate notes :
Particulars Opening Closing

Furniture 20,000 28,000
Accumulated Depreciation on furniture 6,000 9,000
During the year furniture costing Rs.8,000 having depreciation of Rs.2,000 was
sold for Rs.5,000.
22. From the following , calculate cash flows from Investing Activities:
Particulars 31.3.2019 31.3.2020
Plant & Machinery 10,00,000 12,00,000
Less : Accumulated Depreciation 1,00,000 1,50,000
9,00,000 10,50,000
10%Investment (Long term) 2,00,000 1,00,000
Land (At cost) 1,00,000 60,000
(i) A part of Machinery costing Rs.1,00,000 having depreciation of Rs.10,000
was sold at a profit of Rs.20,000.
(ii) Land was sold at a profit of Rs.60,000.
(iii) Half of the investments were sold at a profit of 10% at the beginning of the
year.
23. From the following information, calculate Cash Flow Investing Activities:

Machinery (at cost) 60,000 40,000
Accumulated Depreciation 12,000 9,000
During the year a machine costing Rs. 10,000 was sold at a loss of Rs. 2,000.
Depreciation on machinery charged during the year amounted to Rs. 6,000.

24. From the following Balance Sheets of X Ltd, prepare Cash Flow Statements:
Note 31.3.2020 31.3.2019

Particular
No. (Rs.) (Rs.)

(a) Share Capital 1 2,30,000 2,00,000
10% Debentures 14,000 10,000
(a) Short-term Borrowings 10,000 25,000
(Bank Overdraft)
(b) Trade Payables 25,000 24,000
(c) Short-term Provisions 3 20,000 9,000
Total 3,04,000 2,74,000
II. Assets
(a) Fixed Assets 4 1,70,000 1,60,000
2. Current Assets
(a) Trade Receivables 28,000 40,000
(b) Inventories 70,000 60,000
(c) Other Current Assets: 3,000 1,000
Prepaid Expenses
(d) Cash & Cash equivalents 33,000 13,000
Total 3,04,000 2,74,000

Note to Accounts:
Particulars
2020 (Rs.) 2019 (Rs.)
1. Share Capital
Share Capital 2,10,000 1,70,000
12% Preference Share Capital 20,000 30,000
2,30,000 2,00,000
Balance in Statement of Profit 4,000 2,000
5,000 6,000
3. Short-Term Provisions
4. Fixed Assets
Cost 2,00,000 1,80,000
Less: Accumulated Depreciation 30,000 20,000
1,70,000 1,60,000
(i) Fixed Assets sold for Rs.12,000, their cost Rs.30,000 and accumulated
depreciation till date of sale of them Rs.8,000.
(ii) Interim Dividend during the year Rs.9,000.
(iii) Tax paid Rs.7,000.
(iv) debentures were issued on 31st March 2020.
25. Following figures are available from the records of a company;
2020 2019
Plant and Machinery 80,000 1,40,000

(i) The provision for depreciation is Rs.40,000 and Rs.70,000 in the
beginning and at the end of the year.
(ii) A plant costing Rs.20,000 (depreciation already provided Rs.8,000) has
been sold for Rs.6,000.
Analyse the impact on Cash Flows from Investing Activities.
26. Following figures are available from the records of a company;

2020 2019
Plant and Machinery 5,00,000 7,00,000
(i) A part of Machinery costing Rs.50,000 having depreciation of Rs.10,000
was sold for Rs.35,000.
(ii) Depreciation on Machinery charged during the year Rs 30,000.
Analyse the impact on Cash Flows from Investing Activities.
27. Calculate Cash flows from Financing Activities & operating Activities:
Equity and Liabilities
2020 (Rs) 2019 (Rs)

Preference Share Capital 4,00,000 5,00,000
Surplus, i.e. Balance in Statement of Profit and Loss 4,50,000 2,50,000
Dividend Payable 20,000 ...…
1. Proposed dividend on equity shares for the years ended 31st March, 2019
and 2020 were Rs. 1,20,000 and Rs. 1,40,000 respectively.
2. An Interim Dividend of Rs. 70,000 on Equity Shares was paid on 31st
December, 2019.

28. Calculate Cash flows from Financing Activities & operating Activities:
Equity and Liabilities
2020 (Rs) 2019 (Rs)
Surplus, i.e. Balance in Statement of Profit and Loss 700,000 60,000
Dividend Payable 10,000 ……
Securities Premium Reserve 15,000 10,000
Discount on issue of Debentures - 10,000
1. Proposed dividend on equity shares for the years ended 31st March, 2019
and 2020 were Rs. 80,000 and Rs.1,00,000 respectively.
2. An Interim Dividend of Rs.70,000 on Equity Shares was paid on 31st
December, 2019.
3. Preference Shares were issued on 31st March 2020.
29. From the following particulars of Shaw Ltd. Calculated Cash Flows from
financing activities
31st March 31st March 31st March 31st March
Liabilities Assets
2020 2019 2020 2019
Equity Shares Capital 6,00,000 5,00,000 Discount on Issue 13,000 8,000
14% debentures 3,00,000 2,00,000 of Debentures
18% Preference Share 2,00,000 3,00,000 Underwriting 20,000 --
Capital Commission
Securities Premium Reserve 1,30,000 1,00,000 On issue of shares
(i) Dividend on preference shares and an interim dividend @ 15% were paid
on equity shares on March 31, 2020.
(ii) Preference Shares were redeemed on March 31, 2020 at a premium of 5%.
Such premium has been provided out of profit.
(iii) New shares and debentures were issued on March 31, 2020.

31st March 31st March Assets 31st March 31st March
Liabilities
2020 2019 2020 2019
Equity Shares Capital 7,00,000 6,00,000 Discount on Issue - 10,000
12% Preference Share 3,00,000 2,00,000 --
Capital
Securities Premium Reserve - 10,000
(i) Dividend on preference shares and an interim dividend @ 15% were paid
on equity shares on March 31, 2020.
(ii) New shares and debentures were issued on March 31, 2020.
(iii) Discount on issue of Debentures was Fully written off from Securities
Premium Reserve A/c.
31st March 31st March Assets 31st March 31st March
Liabilities
2020 2019 2020 2019
Equity Shares Capital 7,00,000 1,00,000 Discount on Issue - 15,000
Preference Share Capital 3,00,000 2,00,000 --
Securities Premium Reserve - 10,000
(i) Proposed dividend on equity shares for the years ended 31st March, 2019
and 2020 were Rs. 90,000 and Rs.1,20,000 respectively.
(ii) New shares and debentures were issued on March 31, 2020.
(iii) Discount on issue of Debentures was written off from Securities Premium
Reserve A/c.

32. (a) XYZ Ltd. provided the following information, calculate cash flows from
Financial Activities:

12% Debentures 2,00,000 1,00,000
(i) Interest Paid on Debentures Rs.19,000.
(ii) Dividend paid Rs.50,000
(iii) During the year 2005-06 , XYZ Ltd. issued bonus shares in the ratio of 5:1
by capitalising reserve.
(b) XYZ Ltd. provided the following information, calculate cash flows
from Financial Activities:

(i) During the year 2005-06 , XYZ Ltd. issued bonus shares in the ratio of 5:1
(c) XYZ Ltd. provided the following information, calculate cash flows
from Financial Activities:

(i) During the year 2005-06, XYZ Ltd. issued bonus shares in the ratio of 5:1

33. From the following particulars of XYZ Ltd. prepare the Cash Flow Statement:
(a) Share Capital 1 4,50,000 5,00,000
Long-term Borrowings
10% Debentures 3 2,00,000 1,50,000
(a) Trade Payables 1,45,000 20,000
(b) Short-term Provision:
Provision for Doubtful Debts 15,000 10,000
Total 10,70,000 8,30,000
II. Assets
(a) Fixed Assets
Tangible Assets 4 6,00,000 4,90,000
Intangible Assets 5 20,000 20,000
(b) 10% Investments 80,000 30,000
2. Current Assets
(a) Trade Receivables 1,50,000 1,00,000
(b) Inventories 90,000 1,00,000
(c) Cash and Cash Equivalents 6 1,30,000 80,000
(d) Other Current Assets 7 ------ 10,000
Total 10,70,000 8,30,000

Notes to Account:
Particulars
2020 (Rs.) 2019 (Rs.)
1. Share Capital
4,50,000 5,00,000
2. Reserve and Surplus
Balance in Statement of Profit and Loss 1,90,000 50,000
Securities premium reserve 10,000 -------
General Reserve ------- 50,000
2,00,000 1,00,000
3. Long-term Borrowings
10% Debentures 2,00,000 1,50,000
4. Tangible Assets
Machinery 3,00,000 2,00,000
Plant 3,30,000 3,10,000
Less: Accumulated Depreciation (30,000) (20,000)
6,00,000 4,90,000
5. Intangible Assets
Goodwill 10,000 ----
Patents 10,000 20,000
20,000 20,000
6. Cash and Cash Equivalents
Cash in Hand 85,000 50,000
Cash at Bank 45,000 30,000
1,30,000 80,000
7. Other Current Assets
Underwriting Commission ------ 10,000
------ 10,000

You are informed that during the year:
(i) A machine with a cost price Rs.50,000 having depreciation of Rs.10,000 was
sold for Rs.25,000.
(ii) Depreciation charged on Machinery during the year was Rs.70,000.
(iii) Preference shares were redeemed on 31st March, 2020 at a premium of 5%.
(iv) A part of plant costing Rs.20,000 having depreciation of Rs.5,000 was sold for
Rs 18,000.
(v) An Interim Dividend of 15% was also paid on 31st March, 2020.
(vi) Tax made during the year Rs.30,000.
(vii) Debentures were issued at the beginning of Current year at Premium of 20%.
(viii) Investments were purchased at the end of current year.
(ix) Proposed dividend on equity shares for the years ended 31st March, 2019 and
2020 were Rs.60,000 and Rs.70,000 respectively.
(x) Patents were sold at a profit of 20%.
(xi) During the year 2019-20 , XYZ Ltd. issued bonus shares in the ratio of 1:1 by
capitalizing General reserve.
You are required to prepare a Cash-Flow Statement.
THEORY ASSIGNMENTN On CASH FLOW STATEMENT
Hints for identifying whether a Transaction is (i) Operating Activity (ii) Investing
activity (iii) financial Activity
(i) Identify those transactions which are concerned with revenue earning process
of a company. These will be Operating activities
(ii) Identify the transactions concerned with purchase, sale and service of
investments i.e. receipt of interest and dividend on investments. These will be
Investing activities
(iii) While deciding the nature of an activity take care to keep in mind the nature of
business of the company i.e whether a company is a finance company like a
Bank or a Mutual fund company or a Non - Finance Company

TREATMENT Of INTEREST AND DIVIDENT
(i) Interest Received
(a) For Finance Company ---- Operating Activity
(b) For Non- Finance company ---- Investing Activity
(ii) Interest Paid
(b) For Non - Finance company ---- Financing Activity
(iii) Dividend Received
(b) For Non- Finance company ---- investing activity
(iv) Dividend Paid
(a) For Finance Company ---- Financing Activity
(b) For Non - Finance company ---- Financing Activity
(iv) All the Transactions related to raising of Capital, loans, refunds of loans and their
servicing i.e payment of interest on loans and dividend shall be treated as
financial activities.
(iv) All those items in the above list which are almost equal to cash or which can be
converted into cash without any risk of loss in value shall be grouped under cash
equivalents like marketable securities, Cash Balance, Bank Balance.
(vi) Note: Bank Overdraft & Cash credit are taken as a part of Financing activities.

EXERCISE:
1. From the following, classify the items into Operating, Investing and Financial
Activities and those relating to cash and cash equivalents:
S.No. Item Cateogory of CFS
1 Cash purchases of Goods Operating
2 Cash received from Debtors Operating
3 Issue of shares Investing
4 Purchase of Investments Investing
5 Sale of Fixed Assets Investing
6 Cash sales of Goods Operating
7 Purchase of Fixed Assets Investing
8 Cash Paid to Creditors Operating
9 Issue of Debentures at Par Financial Activities
10 Sale of Investments Investing
11 Redemption of Debentures in cash Financial Activities
12 Marketable securities Cash & Cash
Equivalents
13 Manufacturing Expenses paid Operating
14 Dividends Paid by a Finance Company Financial Activities
15 Dividends Paid by a Non Finance Company Financial Activities
16 Proceeds from sale of investments by a Finance Operating
Company
17 Proceeds from sale of investments by a Non Investing
Finance Company
18 Redemption of Preference shares in cash Financial Activities
19 Cash Credits Financial Activities
20 Office Expenses paid Operating
21 Selling and Distribution Expenses Operating

22 Interest Paid by a Finance Company Operating
23 Interest Paid by a Non Finance Company Financial Activities
24 Bank Balance Cash & Cash
Equivalents
25 Dividends Received on shares by a Finance Operating
Company
26 Dividends Received on shares by a Non Finance Investing
Company
27 Income Tax paid Operating
28 Demand Deposits Cash & Cash
Equivalents
29 Rent received by a company whose business is Operating
property business
30 Interest Received by a Finance Company Operating
31 Interest Received by a Non Finance Company Investing
32 Rent received by a company which is not in Investing
property business
33 Sale of Patents and trademarks Investing
34 Income tax refund received Operating
35 Purchase of Goodwill Investing
36 Refunds of Long term Loans Financial Activities
37 Brokerage paid on Investments for a Finance Operating
Company
38 Brokerage paid on Investments for a Non Finance Investing
Company
39 Underwriting commission Paid to underwriters Financial Activities
40 rent paid Operating
41 Salaries paid. Operating
42 Interim Dividend paid by a Finance Company Financial Activities

43 Interim Dividend paid by a Non Finance Financial Activities
Company
44 Depreciation Operating
45 Brokerage on issue of shares Financial Activities
46 Royalities and Commission received Operating
47 Investment in Debentures due for redemption Cash & Cash
within 3 months Equivalents
48 Securities premium reserve on issue of shares or Financial Activities
debentures
49 Loan element of the installment paid in respect of Investing
a machinery purchased on long-term deferred
payment basis
50 Cash receipts from royalties, fees, commissions, Operating
51 Dividend distribution tax paid Financial Activities
2. State which of the following would result in inflow/outflow of funds if the funds
were defined as cash & Cash Equivalents :
(i) Purchase of goods for cash.
(ii) Purchase of building against a long-term loan.
(iii) Raising short term loan
(iv) Issuance of dividend in the form of share capital.
(v) Sales of fixed assets (book value Rs. 500) at a loss of s. 30.
(vi) Cash paid to creditors.
(vii) Cash Deposited into Bank
(viii) Cash Withdrawn from Bank
(ix) Purchase of Marketable Securities
(x) Sale of Marketable Securities
(xi) Decrease in Bank Overdraft
(xii) Increase in Cash Credit

Answers & Solution
1. Operating Activities = Rs.52,500

2. Net Cash Flow From Operating Activities = Rs.44,500.
3. Net Cash Flow From Operating Activities = Rs.4,46,000
4. Net Cash Flow From Operating Activities = Rs.5,79,000.
5. Net Cash Flow From Operating Activities = Rs.68,000.
13. Net Cash Flow From Investing Activities = Rs.1,80,000.
Net Cash Flow From Financing Activities = Rs.20,000.
14. Net Cash Flow From Operating Activities = Rs.(1,50,000)
Net Cash Flow From Investing Activities = Rs.(1,60,000)
Net Cash Flow From Financing Activities = Rs.6,00,000
Net Cash Inflow = Rs.2,90,000.
Net Cash Flow From Investing Activities = Rs.(90,000)
Net Cash Flow From Financing Activities = Rs.60,000
Net Cash Inflow = Rs.1,34,000
16. Net Cash Flow From Operating Activities = Rs.75,000

Net Cash Inflow = Rs.30,000
17. Net Cash Flow From Operating Activities = Rs.(12,800)
Net Cash Outflow = Rs.(14,000)
Net Cash Flow From Financing Activities = Rs.1,68,500
Net Cash Flow From Financing Activities = Rs.(10,000)
Net Cash outflow = Rs.15,000
21. Net Cash Flow From Investing Activities = Rs. (11,000)
22. Net Cash Flow From Investing Activities = Rs.(30,000)
23. Net Cash Flow From Investing Activities = Rs.(25,000)
Net Cash inflow = Rs.20,000

25. Net Cash Flow From Investing Activities = Rs.16,000
26. Net Cash Flow From Investing Activities = Rs.(2,35,000)
29. Net Cash Flow From Financing Activities = Rs.(57,000)
30. Net Cash Flow From Financing Activities = Rs.(44,000)
31. Net Cash Flow From Financing Activities = Rs.4,80,000
32. (a) Net Cash Flow From Financing Activities = Rs.31,000
(b) Net Cash Flow From Financing Activities = Rs.1,00,000
(c) Net Cash Flow From Financing Activities = Rs.(90,000)
Net Cash Flow From Financing Activities = Rs.(1,94,000)
Net Cash inflow = Rs.50,000
EXERCISE:
2. (i) Out Flow (ii) No Flow (iii) In Flow
(iv) No Flow (v) In Flow (vi) Out Flow
(vii) No Flow (viii) No Flow (ix) No Flow
(x) No Flow (xi) Out Flow (xii) In Flow
  


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I am the Best  Financial Statement of a Company |Class-XIIth

Chapter 1 Financial Statement

S.No. Items Sub Heading Heading

1. Term loan from Bank Long term borrowings NON CURRENT

12. Interest Accrued on Other Current liabilities CURRENT

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27. B/P of 3 months Trade Payables CURRENT

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42. Loan Payable in 6 months Short term borrowings CURRENT

54. Unamortized Expense Other Non Current Assets NON CURRENT

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57. Cheques/Drafts in Hand Cash and Cash Equivalents CURRENT ASSETS

58. Prepaid Wages Other Current Assets CURRENT ASSETS

60. Computers Fixed Asset (Tangible NON CURRENT

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73. Formulae Fixed Asset (Intangible NON CURRENT

77. Patents Fixed Asset (Intangible NON CURRENT

82. Accumulated Depreciation Other current liabilities CURRENT

87. Bank overdraft Short term borrowings CURRENT

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90. Intellectual Property Fixed Asset (Intangible NON CURRENT

94. Treasury Bills Current Investments CURRENT ASSET

95. Models and designs Fixed Asset (Intangible NON CURRENT

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1. Classify the liabilities given below as Non-current Liabilities and Current

(i) Trade Payables 11 8

PROFIT & LOSS ACCOUNT ITEMS

S.No. Items Major-Head Sub -Head

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8. Net gain on foreign currency

10. Net gain on sale of investments

12. Power and fuel

14. Discount on issue of debentures

16. Amortized copyrights

20. Profit on sale of investment

22. Commission received

24. Bank interest

26. Work in progress

28. Advertisement expenses

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30. Interest on loans

32. Audit fee

36. Postage charges

38. Bad debts

40. Interest on fixed deposits

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Answers & Solution

1. (NON-CL= (iii), (v); CL= ((i),(ii),(iv),(vi),(vii) )

PROFIT & LOSS ACCOUNT ITEMS

S.No. Items Major-Head Sub -Head

1. Machine Depreciation Expenses Depreciation and

8. Net gain on foreign currency Expenses Finance Cost

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12. Power and fuel Expenses Other expenses

16. Amortized copyrights Expenses Depreciation and

18. Carriage Expenses Other expenses

22. Commission received Incomes Other income

26. Work in progress Expenses Purchase of stock in trade

28. Advertisement expenses Expense Other expenses

30. Interest on loans Expense Finance Cost

Author: NITESH MEHRA.: 9811991551, 9540206969, 9953856969 |12

32. Audit fee Expense Other expenses

34. Insurance Expense Other expenses