Corporate Accounting 20.49 Preparation of Balance Sheet and Statement of Proprietors’ Funds Mustration 61 From the following particulars, prepare a summarised Balance Sheet in detail as at 31st March, 2016 : Fixed Assets to Networth = 0.8 : 1 Current Ratio —3: 1 Fixed Assets —€ 8,00,000. Reserve included in proprietor’s fund — 25% Acid Test Ratio— 3:2 Cash and Bank —@ 15,000 Long-term Loan —?Mustration 62 From the following information, prepare a summarised Balance Sheet of X Ltd. as at 31st March, 2016 assuming that Capital is composed of Equity Shares of € 10 each. Liquid Ratio Ls Current Ratio 25 Asset (Fixed) Proprietorship Fund Ratio 075 ‘Working Capital ® 1,20,000, Reserve and Surplus = "60,000 Bank Loan. ® 20,000Mustration 63 From te following infarnation of Mr. R. Gupta, make outa Sutement fap Fn possible: has many details as (i) Current Ratio 25 (ii) Liquid Ratio 15 (ii) Proprietory Ratio (Fixed Assets / Proprictory Funds) 075 (iv) Working Capital £120,000 (¥) Reserve and Surplus = "80,000 (vi) Bank Overdrat © 20,000 (vit). There are no long term loans and fictitious assets (viii) Bank Overdraft is not payable immediately.Mlustration 64 From the following information prepare a Balance Sheet of Moon Ltd. as on 31.12.2015 Current Ratio Liquidity Ratio Fixed Assets to Proprietorship Ratio Gearing Ratio (Preference Share Capital to Equity Share Capital) Working Capital Reserves and Surplus Bank Loan (Not payable immediately) Long-term Loan Solution Ralance Sha of Moon Ltd. as at 44st Dacamber. 2015, © 8,000 © 2,000 © 2,000 Nil 125 078Mustration 65 From the following particulars prepare a summarised Balance Shect of a sole proprietor in detail as at 31st December, 2013: Fixed Assets to Networth, 08:1 Current Ratio 3:1 Reserve included in Proprietors’ Fund 25% Acid Test Ratio 3:2 Fixed Assets 8,00,000 Cash and Bank Balance & 15,000 Current Liabilities ® 1,50,000 Long-term Loan ?‘Mustration 66 From the following information relating to Moon Light Ltd., prepare a Balance Sheet as on 31st March, 2016 (i) Current Ratio 25 ii) Liquid Ratio 1s Git) Net Working Capital = 3,00,000 (iv) Cost of Sales / Closing Inventories 8 times () GP. Ratio 20% (vi) Average Debt Collection Period 1.5 months (vii) Fixed Assets / Shareholders’ Networth 078 (viii) Reserves and Surplus / Share Capital 050Mustration 67 From the following information, prepare a summarised Balance Sheet of Amar, a sole proprietor as at 31st March, 2016 : Inventories velocity 6 Fixed assets to turnover ratio 4 Capital tumover ratio 2 Gross Profit 20% Debit collection period 2 months Creditors payment period 73 days ‘The gross profit was & 60,000. Closing inventories was € 5,000 in excess of opening inventories. All workings should form part of your answer.Mustration 68 Using the following data, complete the Balance Sheet of X Limited as at 313.2000 (a) Gross Profit 25% of Sales (b) Gross Profit ~€ 1,20,000 (6) Shareholders’ equity =& 20,000 (a) Credit sales to total sales = 80% (6) Total turnover to total assets = 4 times (0 Cost of sales to Inventory ~ 10 times (2) Average collection period = 5 days, assume 365 days in a year. (h) Long-term debt = (i) Current ratio = 1.5 (j) Sundry Creditors ~€ 60,000. Balance Sheet of X Limited as at 31.3.2000 erry z ro z ‘Sy Cris Cash Leng Debt (alaci fue) Sundry Debors Share Capital Invetery Feed Assets ICA. (mer) — November, 2000]Mlustration 69 From the following information relating to Wise Limited, you are required to prepare its summarised Balance Sheet: {8} Curent Ratio 25 (g) Sales /Deblors Ratio 60 (0) Aid Test Ratio 15 (h) Reserves Capital Rato 10 {6) Gross Pott Sales Ratio 02. ()Netwoth /Longerm Loan Rao 20 {(@) Net Working Capital / Net Wort Ratio 03. ()inventaies velocity 2Monihs {@) Sales Not Fixed Assets Ratio 20. (k) Pap Shae Captal TO Lakhs {f Sales /Networth Ratio 18Mustration 70 From the following particulars prepare the Balance Sheet of Robin Hood Ltd, as at 31st March, 2016 : ‘Current Ratio. 2 Working Capital = 4,00,000 Capital Employed to Current Assets 3:2 Fixed Assets to Turnover 13 Sales Cash / Credit 1:2 Creditors velocity 2 months Inventories velocity 2 months Debtors’ velocity 3 months Capital Employed : Net profit 10% of Tumover General Reserve 2'/:% of Tumover Debenture / Share Capital 1:2 Gross Profit Ratio — 25% (to Sales)Mustration 74 With the help of the information given below, prepare a Trading Account, Profit and Loss Account and Balance Sheet of Amar : {@) Gross Proft Ratio 25% (@) Curent Rato 1 (@)Net Profit Ratio 20% (Fined Assos / Capital 514 {@) Sake venta Ratio 10. (g) Fixed Assets +€10,0,000, (@) Fined Assets Total Curent Assos 5/7 (t) Closing inventories *¢1\00,000Mustration 72 Prepare Trading Account and Balance Sheet from the following particulars Inventories veloty 6 Crodiors Payment prod 2 mons Gross Proft margin 20% Gross Prof +60 00,000, Capita Tumover ato +4 Exoass of Closing nveioris over Opening "500.000, Inventoies Debt Colton Period 3 monins Assume that no cash purchases andl cash sales are made, Bank balance is the balancing figure in the Balance Sheet [ethi University B.Com (Hons) — Adapted)Mustration 73 Prepare Balance Sheet and Profit and Loss Account of Rohit from the following information : Capital —€ 4,00,000; Working Capital —€ 1,80,000; Bank Overdraft (not payable immediately) —€ 30,000. ‘There is no fictitious asset. In current assets there is no assets other than inventories, debtors and cash Closing inventories is 20% higher than opening inventories. Current Ratio — 2.5; Quick Ratio — 2; Proprictory Ratio (fixed assets: proprictory fund) — 0.6; Gross profit ratio — 20% (to Sales); Inventories Turnover — 5 Times; Debtors’ velocity — 73 days; Net profit — 10% of capitalMlustration 74 You have been asked by the Management of The Wonderful Suppliers Lid to project the Balance Sheet and a Statement of Profit and Loss on the b 2016 Ratio of Gross Profit, Inventories Tumover Ratio Average Debt Collection Period Creditors’ velocity Current Ratio Proprietory Ratio (fixed assets to capital employed) Capital Gearing Ratio (Preference Shraes and Debenture to Equity Funds) Net Profit to Issued Capital (Equity) General Reserve and Profit and Loss to Issued Capital (Equity) Preference Share Capital to Debentures Cost of goods sold consists of 50% for materials and 50% for wages Gross Profit Working notes should be clearly shown. ‘ofthe following estimated figures and ratios, for the next financial year ending March 31, 25% 5 Times 3 months 3 months 2 80% 3:7 10% 4 2 © 12,50,000Preparation of Balance Sheet and Statement of Proprietors’ Fund 10. ‘From te following deals svllabe, pepe a ummaraed Balai Sheet of ABC Laas o 31st December 2018: Fixed assets to Networth .. . : . . 07551 Current Ratio. . $ 3:2 Acid Test Ratio ‘ 3:2 Reserves included in the Proprietors’ Fund ss ee ed Current Liabilities. ‘ . é : : * .. % 2,00,000 Cash and Bank balances : . = 10,000 Fixed Assets ® 6,00,000. 11, Shri Devdas asks you to prepare his Balance Sheet from the particulars furnished hereunder Inventories velocity 6; Gross profit margin 20%; Capital tumover ratio 2; Fixed assets turnover ratio 4; Debt collection period 2 months; Creditors payment period 73 days; Gross Profit was ® 60,000; Exeess of closing inventories over ‘opening inventories was € 5,000; Difference in Balance Sheet represents bank balance. 12, Prepare a Balance Sheet from the particulars furnished hereunder Iventries volt 6 Fixed assets turnover 4 Gross profit margin 20% Debi collection period 2 months Capital turnover rato 2 Creditors payment period 73 days Gross profit & 60,000 Excess of closing inventories over opening inventories was @ 5,000 Difference in Balance Sheet represents bank balance ‘The ene sales and purchases are made on credit basis ‘[Dethi University B.Com. (Hons) — 2001] 13. Based on the following information of the financial ratios prepare Balance Sheet of Star Enterprises Lid as of December 31, 2015. Explain your workings and assumptions Curent Ratio 25 Ratio of ross prof lo sales 20% guilty Ratio 1.5 “Tumover rato lone xed assets 2 Net Working Capital 6,00,000 ‘Average debt colton period 2.4 months Inventories Tumover Ratio 5 Longytem debt to capital and reserve 7/25, Fined asses tonetworth 0.8 14, From the following information, prepare the Balance Sheet of Rameshpathy as on 31.3.2016 Fixed Assets : . : - : . 3 6 lacs Working capital: 4 lacs Current ratio Mev ae cree : - ‘ 2 Fixed assets to turnover 4 cr. 2 ‘ me a s ‘ 2. 25% Debtors’ velocity - : : : ce «LS months Creditors’ velocity 2 months Inventories 2). a : + 2 months Net profit : : of tumover REEVE oa ee ee em an nooo 3 DBOENCL pote Capital gearing. - . . . - . o tlCorporate Accounting 20.81 15, Prom the following information of X Engineering Co., computethe proforma Balance Sheetifits sales are 16,00,000. SalestoNetworh 23 times ‘Curent Ratio 2.9 times Curent Liaiites fo networh 42% Sales to cosing inventor 4.5 times Total Libiites to nebwots 75% ‘Average colecion period 64 days Proforma Balance Shoo bites z Tse = Reterth 7 || red Assets 7 Longer Labistes 2 |\cash 2 Curent Libites| 2 | verories 2 Suey Debiors 2 Caleulations are to be the nearest rupee 16. From the following information, make out a statement offproprietors fund}vith as many details as possible : () Curent Reto 25 () Werking Capital 6,000 (i) Ligue Rao 15 (0) Reser and Supus & 40,000 Ai) Popretry Ratio (xed assets / proprietor fund).75, (v) Bank Overdraft & 10,000 (i) Ther is no fong term loan or tii assets 17. Following are the ratios relating tothe trading activities of an organisation Debtors velocity z 3 months Inventories velocity * 4 months Creditors velocity : : : : : : . 2 months i ee eee eee ee rere | Capital tumover ratio 3 Fired gsm umovernio |) tee re Gross Profit for the year ended 31st March, 2016 was % 7,530,000. Inventories as on 31st March, 2016 was % 30,000 more than it was on Ist April, 2015, At the end of the year Bills Payable and Bills Receivable were % 45,000 and 7 50,000 a cream was 7 1,10,000. Make necessary assumptions that you think. Prepare the Statement offproprstory Fundfor the year ended 31st March, 2016 18, The Balance Sheet of Major Limited as on 31st March, 2016 is as under Balance Sheet of Major Limited as at 31st March, 2016 Noi | Amount Particulars No. @ io @ @) IL EQUITY AND LIABILITIES (1) Shareholders’ Funds (a) Snare Capital 2,000 Equty Shares of 100 each fly pad 2.00000 1,000, 7% Preference Shoes of € 100 each fly pid 4100.00 (b) Reserves and Surplus — General Reserve 60,000 (2) Share Application Money Pending Allotment - (3) Non-current Liabilities (2) Long-term Borrowings — 12% Debentures 60,000 (4) Current Liaittes : (2) Trade Payables — Sundry Creditors 80,000 TOTAL 5.00000, WASSETS (1) Non-curent Assets : (2) Fed Assets (0 Tengble Assets Pant and Mactinory 500,000 Less: Accumulated Depreciation 160,000 3.4000020.82 Ratio Analysis (2) Current Assot (2) Inventories 60,000 (b) Trade Receivables —Debiors 80,000 () Cash and Cash Equivalents — Cash in Hand 20,000 TOTAL 500,000 ‘The company wishes to forecast Balance Sheet as on 31st March, 2017. The following additional particulars are available (i) Fixed assets costing & 1,00,000 have been installed on 1.4.2016 but the payment will be made on 31.3.2017. (ii). The fixed asset tumover ratio on the basis of gross value of fixed assets would be 1 (it) The inventories tumover ratio would be 14.4 (calculated on the basis of average inventories). {iv) ‘The break-up of cost and profit would be as follows : Materials 40% Labour 25% Manufacturing expenses... PEGE EG ETT EEE HE a eT OK Office and selling expenses ‘ Ce Ook ene eo woe to A Depreciation. . “ : gGi2 Ss + 5% Profit oR 8 ym Se SERRE GEER ES s+ + 10% 10% ‘The profit is subject to interest and taxation at 50%, {v)_ Debtors would be 1/9 of sales. (vi) Creditors would be 1/5 of material consumed, (vii) In March 2016, a dividend @ 10% on equity capital would be paid, (viii) 2% Debentures for & 25,000 have been issued on 1.4.2016. Prepare the forecast Balance Sheet as on 31st March, 2017 and show the following resultant ratios : (a) Current Ratio; (b) Fixed Assets / Networth Ratio; and (c) Debt Equity Ratio, Preparation of Profit and Loss Account and Balance Sheet 19, With the help of information given below, prepare Statement of Profit and Loss and Balance Sheet of Sunshine Lid. {a) Gross Profit ratio 25%; (b) Net Profit / Sales 20%; (c) Sales Inventory ratio 10; (d) Fixed Assets / Total Current Assets 5/8; (e) Current ratio 1; (f) Fixed asset /Share Capital 54; (g) Fixed Assets 8 lakhs; (h) Closing inventories € 80,000. (Assume that there was no balance of any reserves and surplus other than the balance of Profit and Loss Account of current year). 20. ‘The financial information of Good Luck Ltd. for the year 2015 are given below Ratio of Current Assets to Current Liabilities. ee enw ss sos LISt01 Liquidity Ratio (Debtors and Bank balance to current laites) 125 t0 1 Issued Capital (equity shares of 1 each)... ee es 120,000 Net Current Asstes (as over current liabilities) | Fe % 60,000 ied Asses (oot ic) percsingsofsharcolioweqily aca clog dns) 5 Xs 5 OO Gross Profit (percentage of turmover) Ae 8 se 20% Annual rate of turnover of inventories (based on cost on 31.12.2015) 5.26 times Average age on outstanding debtors for the year 2015 2 months Net Profit (percentage on issued share capital)... fe 16% On 3st December, Current Assts consisted of inventories, debtors and bank balances. ‘You are required to prepare Statement of Profit and Loss and Balance Sheet for the year ending on 31st December, 2015 [B.Com Hons.) — Adapted] 21, From the following information, prepare the projected Trading and Profit and Loss Account for the next financial ‘year ending December 31, 2015 and the projected Balance Sheet as on that date Rate of Gross Profit 25% Net Profit to Equity Capital. : 5 : : te % & + 10% Inventories Turnover Ratio. = a i : ane Peee ne Stimes, Average Debt Collection Period 2 months Creditors velocity. foe ee ee ee 2s 3months Current ratio. ora uve eee eee ae Proprictory ratio (fixed assets to capital employed) ss LL 80m22. Capital gearing ratio (Preference Shares and Debentures to Equity) General Reserve and Profit and Loss to issued Equity Capital Preference Share Capital to Debentures Corporate Accounting 20.83 Cost of sales consists of 40% for materials and balance for Wages and Overheads. Gross Profit € 6,00,000. Working. notes should be clearly shown, Complete the following annual financial statement on the basis of ratios given below : or. Prof and Loss Account far the year ended 30th June, 2016 Gr Particulars z Particulars z “To Cost of goods sold 6,00 000 | By Sales '20,00,000 “To Operating expenses ‘To Eamings befor interest and tax To Dabenture interest 101 By Eamings before Interest and Tax To Income Tax To Not Profit Balance Sheet as at 30th June, 2016 Uabites x Asses z Webvert Fixed Assols ‘Share Capital Current Assets Reserve and Surplus Cash 10% Debentures Inventories ‘Suncry Creditors 0,000 Debtors 35,000 (Net Proft to Sales 5% (i) Curent Ratio 1.5 (iy Return on Networth 20% (iv) nvertorytumover (based on cost of goods sod) 15 times (v) Share capital to reserves 4:1 (wi) Rate of incomertax 50%10. ‘Total of Balance Sheet © 11,00,000; Share Capital € 6,00,000; Reserves © 2,00,000; Long-term Liabilities © 1,00,000. 11. Cash at Bank € 31,500; Total of Balance Sheet € 199,000. 12, Total of Balance Sheet € 1,99,000; Capital ® 1,50,000 (based on capital turnover = Net Sales / Capital); Fixed Assets 75,000; Cash and Bank & 31,500 (balancing figure); Creditors € 49,000; Closing Inventories € 42,500; Debtors € 50,000. 13, Total of Balance Sheet & 39,000. 14, Total of Balance Sheet € 14,00,000; Fixed Assets € 6,00,000; Inventories-in-trade € 18,750; Debtors ¢ 18,750; Cash in Hand £7,62,500; Total Current Assets? 8,00,000; Capit £ 5,00,000; Creditors 18,750; Other Current Liabilities © 381,250; Sales © 150,000, 1S, Networth & 6,95,652; Current Liabilities €2,92,174; Long-term Liabilities € 229,568. 16. Proprietors’ Fund € 2,40,000; Application of Fund : Fixed assets € 1,80,000; Working eapital 60,000 ‘Other liquid assets @ 45,000; Creditors ® 10,000. 17. Proprietors’ Fund & 10,00,000; Total assets € 22,65,000; 18, Total of Forecasted Balance Sheet € 5,69,300 19. Gross Profit € 2,00,000; Net Profit 160,000; Total of Balance Sheet & 20,80,000; Long-term Liabilities Ni 20. mg-term Loans 7,75,000, 2. 2.