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Question
| Particulars | ₹ |
| Share Capital | 20,00,000 |
| General Reserve | 5,00,000 |
| Surplus | (1,00,000) |
| Debt-Equity Ratio | 2.5 : 1 |
Long-term Debts will be:
Options
₹ 9,60,000
₹ 60,00,000
₹ 65,00,000
₹ 62,50,000
MCQ
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Solution
₹ 60,00,000
Explanation:
Shareholder’s Funds = Share Capital + General Reserve + Surplus
= 20,00,000 + 5,00,000 − 1,00,000
= ₹ 24,00,000
Debt Equity Ratio = `"Long term Debts"/"Shareholder’s Funds"`
2.5 = `"Long term Debts"/(24,00,000)`
Long term Debts = 24,00,000 × 2.5
= ₹ 60,00,000
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