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Question
Calculate fixed assets from the following:
Share Capital ₹ 7,00,000; Reserve & Surplus ₹ 3,00,000; Current Assets ₹ 1,50,000; Proprietary Ratio 0.8 : 1.
Options
₹ 12,50,000
₹ 11,00,000
₹ 14,00,000
₹ 6,50,000
MCQ
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Solution
₹ 11,00,000
Explanation:
Shareholder’s Funds = Share Capital + Reserve & Surplus
= 7,00,000 + 3,00,000
= ₹ 10,00,000
Proprietary Ratio = `"Shareholder’s Funds"/"Total Assets"`
0.8 = `(10,00,000)/"Total Assets"`
Total Assets = `(10,00,000)/0.8`
= ₹ 12,50,000
Fixed Assets = Total Assets − Current Assets
= 12,50,000 − 1,50,000
= ₹ 11,00,000
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