Analysis of Financial Statements — Accountancy STD 12 Commerce — Question

1. List the four items that are shown under the heading inventories other than
   ‘stock in trade’ in the Balance Sheet of a company as per Schedule III of the Companies Act, 2013.
2. What is meant by ‘Financial Statements’ of a company?

Alka Ltd. issued 5,000, 10% Debentures of ​₹ 1,000 each at a discount of 10% redeemable at a premium of 5% after 5 years. According to the terms of issue ​₹ 500 was payable on application and the balance amount on allotment of debentures. Record necessary entries regarding issue of 10% Debentures.

Calculate Gross Profit Ratio from the following data:
Cash Sales are 20% of Total Sales; Credit Sales are ₹ 5,00,000; Purchases are ₹ 4,00,000; Excess of Closing Inventory over Opening Inventory ₹ 25,000.

Calculate Cash Flow from Investing Activities from the following information:

Particulars	31st March, 2018 ₹	31st March, 2017 ₹
Investments in Land Shares in Z Ltd. 12% Long-term Investments Plant and Machinery Patents Goodwill	3,00,000 1,50,000 80,000 7,50,000 70,000 1,50,000	3,00,000 1,50,000 50,000 6,00,000 1,00,000 1,00,000

Additional Information:

1. A plece of land was purchased as an investment out of surplus. It was let out for commercial purpose and the rent received was ₹ 20,000.
2. Dividend received from Z Ltd. @ 12%.
3. Patents written off to the extent of 20,000. Some patents were sold at a profit of ₹ 10,000.
4. A machine costing ₹ 80,000 (depreciation provided thereon ₹ 30,000) was sold for ₹ 35,000. Depreciation charged during the year was ₹ 70,000.
5. During the year 12% investments were purchased for ₹ 1,00,000 and some investments were sold at a profit of ₹ 10,000. Interest on investments for the year was duly received.

Under what heads the following items are shown in the Balance Sheet of a company?

1. Patents and Trade Marks.
2. Income Received in Advance.
3. Debentures issued by the Company.
4. Stores and Spare-parts.
5. Motor Vehicles.
6. Forfeited Shares Account.
7. Government Securities.
8. Uncalled Liability on partly paid shares.

What is meant by ‘analysis of financial statements’? State any two limitations of such analysis.

Average Inventory ₹ 60,000; Inventory Turnover Ratio 5 Times; Selling price 40% above cost. Calculate Gross Profit Ratio.

State any two items that are included in the following major heads under which liabilities of a company are shown:

1. Reserves and Surplus.
2. Long-term Borrowings.
3. Short-term Borrowings.
4. Other Current Liabilities.

Compute Cash Flow from Operating Activities from the following information:

Particulars	₹
Net Profit after Provision for Tax nd Payment of Dividend Provision for Tax Final Dividend paid during the year Depreciation Loss on Sale of Machinery Patents Amortised Gain on Sale of Land Income Tax Refund	2,15,000 45,000 50,000 25,000 10,000 30,000 70,000 30,000