Question
What is common size balance sheet? what are its objectives?
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Answer
A common size balance sheet is a statement in which total of assets or equity & liabilities is assumed to be equal to 100 and all the figures are expressed as percentage of the total.Objectives of Common-size Balance Sheet:
- To analyse the changes in individual items of Balance Sheet.
- To see the trend of different items of assets, equity and liabilities.
- To assess the financial soundness and understand financial strategy.
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Net Profit after Interest and Tax ₹ 30,000; Fixed Assets ₹ 3,80,000; Current Assets ₹ 1,70,000; Current Liabilities ₹ 50,000; 10% Long-Term Debt ₹ 2,00,000. Tax Paid ₹ 30,000. Calculate Return on Investment
Sonia Ltd. issued a prospectus inviting application for 1,00,000 shares of ₹ 10 each. It received the following applications:
Applications for 40,000 shares (applying for 200 shares or less)
Applications for 1,80,000 shares (applying for more than 200 shares)
The Company allotted the shares proportionately to all the applicants. State the value affected by such decision. Suggest a better alternative for the same.
Applications for 40,000 shares (applying for 200 shares or less)
Applications for 1,80,000 shares (applying for more than 200 shares)
The Company allotted the shares proportionately to all the applicants. State the value affected by such decision. Suggest a better alternative for the same.
VT Ltd forfeited 200 shares of ₹ 10 each, issued at a premium of ₹ 5 per share, held by Mohan for non-payment of the final call of ₹ 3 per share. 100 out of these shares were reissued to Narendra at a discount of ₹ 4 per share. Journalise.
Light Lamps Ltd. issued 50,000 shares of ₹ 10 each as fully paid-up to the promoters for their services to set-up the company. It also issued 2,000 shares of ₹ 10 each credited as fully paid-up to the underwriters of shares for their services. journalise these transactions.
Cost of Revenue from Operations (Cost of Goods Sold) ₹ 5,00,000; Purchases ₹ 5,50,000; Opening Inventory ₹ 1,00,000. Calculate Inventory Turnover Ratio.
[Hint: Closing Inventory = Opening Inventory + Purchases - Cost of Revenue from Operations (Cost of Goods Sold).]
[Hint: Closing Inventory = Opening Inventory + Purchases - Cost of Revenue from Operations (Cost of Goods Sold).]
Shiva Ltd. issued 1,00,000 Equity Shares of ₹ 10 each at a premium of ₹ 5 per share. The whole amount was payable on application. The issue was fully subscribed. Pass necessary Journal entries.
The liquidity of a business firm is measured by its ability to satisfy its long-term obligations as they become due? Comment.
From the following information, calculate Interest Coverage Ratio:
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₹
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10,000 Equity Shares of ₹ 10 each.
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1,00,000
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8% Preference Shares.
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70,000
|
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10% Debentures.
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50,000
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Long-term Loans from Bank.
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50,000
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Interest on Long-term Loans from Bank.
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5,000
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Profit after Tax.
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75,000
|
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Tax.
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9,000
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Complete the Comparative Statement of Profit and Loss:
| Particulars | 2022-23 | 2023-24 | Absolute change | % change |
| Revenue from Operations | 16,00,000 | 20,00,000 | ? | ? |
| Less: Employees Benefit Expenses | 8,00,000 | ? | ? | 25% |
| Less: Other Expenses | 2,00,000 | ? | (1,00,000) | ? |
| Profit before tax | 6,00,000 | ? | ? | 50% |
| Tax @30% | ? | ? | 90,000 | ? |
| Profit after tax | 4,20,000 | ? | 2,10,000 | ? |