Advertisement Remove all ads

Prepare Common-size Balance Sheet and Comment on the Financial Position of Sun Ltd. and Star Ltd. the Balance Sheet of Sun Ltd. and Star Ltd. as at 31st March, 2019 Are: - Accountancy

Ledger

Prepare Common-size Balance Sheet and comment on the financial position of Sun Ltd. and Star Ltd. The Balance Sheet of Sun Ltd. and Star Ltd. as at 31st March, 2019 are:

Particulars

Sun Ltd.

(₹)

Star Ltd.

(₹)

I. EQUITY AND LIABILITIES     

1. Shareholders' Funds 

   

(a) Share Capital

9,00,000

12,00,000

(b) Reserves and Surplus

4,00,000

3,50,000

2. Current Liabilities

 

 

Trade Payables (Creditors)

2,00,000

2,50,000

Total

15,00,000

18,00,000

II. ASSETS    

1. Non-Current Assets

   

Fixed Assets (Tangible)

10,00,000

16,00,000

2. Current Assets

 

 

Trade Receivables (Debtors)

5,00,000

2,00,000

Total

15,00,000

18,00,000

Advertisement Remove all ads

Solution

Common Size Balance Sheet
as at March 31, 2019

Particulars 

Absolute Amount

(Rs)

Percentage of Balance Sheet Total

(%)

Sun Ltd.

Star Ltd.

Sun Ltd.

Star Ltd.

I. Equity and Liabilities

 

 

 

 

1. Shareholders’ Funds

 

 

 

 

a. Share Capital

9,00,000

12,00,000

60.00

66.67

b. Reserve and Surplus

4,00,000

3,50,000

26.67

19.44

2. Current Liabilities

 

 

 

 

a. Trade Payables

2,00,000

2,50,000

13.33

13.89

Total

15,00,000

18,00,000

100.00

100.00

II. Assets

 

 

 

 

1. Non-Current Assets

 

 

 

 

a. Fixed Assets

10,00,000

16,00,000

66.67

88.89

2. Current Assets

 

 

 

 

a. Trade Receivables

5,00,000

2,00,000

33.33

11.11

Total

15,00,000

18,00,000

100.00

100.00

Comments:

1. Star Ltd. has a greater share of Capital in the total sources of funds i.e. 66.67% in comparison to 60% of Sun Ltd.

2. Sun Ltd. retains 26.67% of their earnings as a part of Reserves and Surplus. Whereas, Star Ltd. retains only 19.44% of their earnings.

3. Star Ltd. has invested major portion of its funds on acquiring the Fixed Assets as these are 88.89% of the total application of funds in comparison to 66.67% of Sun Ltd. On the other hand, Sun Ltd. emphasises more on Current Assets as these are 33.33% of the total applications of funds in comparison to 11.11% of Star Ltd.

Concept: Common Size Statements
  Is there an error in this question or solution?
Advertisement Remove all ads

APPEARS IN

TS Grewal Class 12 Accountancy - Analysis of Financial Statements
Chapter 2 Tools of Financial Statement Analysis-Comparative Statements and Common-Size Statements
Exercise | Q 20 | Page 39
Advertisement Remove all ads

Video TutorialsVIEW ALL [1]

Advertisement Remove all ads
Share
Notifications

View all notifications


      Forgot password?
View in app×