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Question -

Following is the Balance Sheet of Title Machine Ltd. as at March 31, 2017.

Particulars  

Amount

₹. 

I. Equity and Liabilities  

 

1. Shareholders’ funds  

 

a) Share capital

24,00,000

b) Reserves and surplus

6,00,000

2. Non-current liabilities  

 

a) Long-term borrowings

9,00,000

3. Current liabilities

 

a) Short-term borrowings  

6,00,000

b) Trade payables

23,40,000

c) Short-term provisions  

60,000

Total

69,00,000

II. Assets

 

1. Non-current Assets  

 

a) Fixed assets

 

Tangible assets

45,00,000

2. Current Assets

 

a) Inventories

12,00,000

b) Trade receivables

9,00,000

c) Cash and cash equivalents

2,28,000

d) Short-term loans and advances

72,000

Total

69,00,000

 

 



Answer -

Calculate Current Ratio and Liquid Ratio.
1. Current Ratio
 
Current Assets = Inventories +Trade Receivables + Cash + Short term Loans and Advances
= 12, 00,000 + 9, 00,000 + 2, 28,000 + 72,000
= ₹ 24, 00,000
Current Liabilities = Trade Payables + Short-term Borrowings + Short-term Provisions
= 23, 40,000 + 6, 00,000 + 60,000
= ₹ 30, 00,000
2. Quick Ratio
 
Quick Assets = Trade Receivables + Cash + Short term Loans and Advances
= 9, 00,000 + 2, 28,000 + 72,000
= ₹ 12, 00,000

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