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The following balances have been extracted from the books of Nirvana Ltd, as at 31st March, 2024:
| Particulars | (₹) | Particulars | (₹) |
| Security deposit for electricity for ten years | 30,000 | Uncalled amount on partly paid-up shares | 8,00,000 |
| Underwriting commission | 20,000 | 10% Debentures | 5,00,000 |
| General Reserve | 70,000 | Statement of P/L (Dr.) | 10,000 |
| Fixed Deposits | 2,00,000 | Calls-in arrears @ ₹ 1 per share | 40,000 |
| Premium on redemption of Debentures | 20,000 | Securities Premium | 2,00,000 |
| Equity Share Capital (1,00,000 shares of ₹ 10 each) |
10,00,000 |
You are required to show the above items in Notes to Accounts accompanying the Balance Sheet of Nirvana Ltd. prepared as per Schedule III of the Companies Act 2013 as at 31st March, 2024.
Concept: Terms of Issue of Debentures> Issue of Debentures at Par
Mention the heading and sub-heading under which Vehicles are shown in the Balance Sheet of a company prepared as per Schedule III of the Companies Act, 2013.
Concept: Statement of Profit and Loss
From the following information, prepare a Common Size Statement of Profit and Loss of Prudence Ltd. for the
year ending 31st March, 2017:
Particulars 31.03.2017
Revenue from Operations 20,00,000
Purchases 15,00,000
Changes in inventories 1,00,000
Other Income (Dividend received) 40,000
Depreciation and Amortization expenses 60,000
Tax Rate @ 40%
Concept: Common-Size Statement
From the following information, you are required to prepare a common size balance sheet of Super Ltd. as at 31st March, 2024.
| Particulars | (₹) |
| Non-Current Liabilities | ₹ 2,00,000 |
| Shareholders’ Fund | 2.5 times more than the Non-Current Liabilities |
| Current Liabilities | ₹ 1,00,000 |
| Current Assets | ₹ 3,00,000 |
| Non-Current Assets | 70% of the Equity & Liabilities |
Concept: Common-Size Statement
Mention whether the following Trade Payable is current liability or non current liability:
| Operating Cycle | Expected Period of Payment |
| 15 months | 12 months |
Concept: Activity Ratios >> Trade Payables Turnover Ratio
The Quick Ratio of a company is 0.8 : 1. State whether the Quick Ratio will improve, decline or will not change in the following cases:
- Cash collected from Debtors ₹ 50,000.
- Creditors of ₹ 20,000 paid off.
Concept: Activity Ratios >> Inventory Turnover Ratio
From the following information calculate the following ratios (up to two decimal places):
- Earning per share
- Price Earning Ratio
- Return on Investments
- Working Capital Turnover Ratio
| Particulars | ₹ |
| Net profit after Interest and Tax | 2,40,000 |
| Tax | 1,60,000 |
| Property, Plant and Equipment | 10,00,000 |
| Non-current Investments (Non-Trade) | 1,00,000 |
| Equity Share Capital (face value ₹ 10 per share) | 5,00,000 |
| 15% Preference Share Capital | 1,00,000 |
| Reserves and Surplus (including surplus of the year under consideration) | 2,00,000 |
| 10% Debentures | 4,00,000 |
| Revenue from Operations | 10,00,000 |
| Working Capital | 1,00,000 |
Note: The market value of an equity share is ₹ 40.
Concept: Profitability Ratios >> Earnings Per Share
Calculate Trade Payables Turnover Ratio (up-to two decimal places) from the following information:
| Particulars | (₹) |
| Trade Payables at the beginning of the year | 70,000 |
| Trade Payables at the end of the year | 80,000 |
| Payment to Trade Payables | 3,20,000 |
| Returns to Credit suppliers | 30,000 |
Concept: Activity Ratios >> Trade Payables Turnover Ratio
State whether creditors would prefer lending to a company with a high Debt-Equity Ratio or a low Debt-Equity Ratio. Give a reason.
Concept: Solvency Ratios >> Debt to Equity Ratio
From the following particulars of Hind Ltd., calculate the preference dividend paid by the company:
| Particulars | |
| Net Profit before Tax | ₹ 20,00,000 |
| Equity Shares of ₹ 10 each (Market Value ₹ 15) | ₹ 40,00,000 |
| Tax Rate | 30% |
| Earning per share | ₹ 2.75 |
Concept: Profitability Ratios >> Earnings Per Share
Calculate the Working Capital Turnover Ratio of Moonlight Ltd., (up-to two decimal places) from the following particulars.
| Particulars | |
| Cash | ₹ 10,00,000 |
| Short-term Loans and Advances | ₹ 3,00,000 |
| Inventory | ₹ 2,00,000 |
| Trade Payables | ₹ 5,00,000 |
| Cost of Revenue from operations | ₹ 12,00,000 |
| Gross Profit on Cost of Revenue from Operations | 25% |
Concept: Activity Ratios >> Working Capital Turnover Ratio
The Adani family has raised their stake in Ambuja Cements by the conversion of 21.20 crore warrants into shares in a transaction that will see them infusing nearly ₹ 6,661 crore.
- What is a share warrant?
- Mention the head under which Money received against Share Warrants is shown in the Balance Sheet of a company prepared as per Schedule III of the Companies Act, 2013.
Concept: Solvency Ratios >> Debt to Equity Ratio
According to the ratings agency Chrisil, healthy demand for grocery items and expansion into tier II and III cities will help organized brick-and-mortar food and grocery (F&G) retailers log a revenue of 14-15% in FY25. The agency further said the debt raising will be capped to ensure healthy key debt protection metrics.
From the following ratios:
- Choose the formula of the ratio to be used by the F&G retailers as a debt protection metrics
- Mention the name of the ratio so chosen
Concept: Solvency Ratios >> Interest Coverage Ratio
Read the following news item of ITC Ltd. and answer the question that follows:
| The company’s board declared an interim dividend of ₹ 6.25 per share for the financial year ending March, 2024. The dividend will be paid between February 26-28, 2024, to the eligible shareholders. |
Which of the following are the attributes of interim dividend?
P: It is a charge against profits.
Q: It is an appropriation of profits.
R: Its declaration and payment will decrease the company’s Current Ratio.
S: Its declaration and payment will increase the company’s Debt Equity Ratio.
Concept: Solvency Ratios >> Debt to Equity Ratio
Bajaj Hindustan Sugar, one of the largest sugar and ethanol producers, in order to revive the company, has offered to invest ₹ 2,500 crore as fresh equity of which ₹ 1,000 crore has already been infused.
What will be the effect of this decision of Bajaj Hindustan Sugar on its DebtEquity Ratio?
Concept: Solvency Ratios >> Debt to Equity Ratio
Calculate Interest Coverage Ratio of Criss Cross Ltd. (up-to two decimal places) from the following information:
| Particulars | (₹) |
| Net Profit after Interest and Tax | ₹ 80,000 |
| Tax Rate | 50% |
| 12% Debentures | ₹ 3,00,000 |
| 9% Bank Loan | ₹ 1,00,000 |
Concept: Solvency Ratios >> Interest Coverage Ratio
The spreadsheet below shows the sales of Jupiter Ltd. made by four salesmen in the four quarters of the financial year 2022-23:
| A | B | C | D | E | F | G | |
| 1 | Sales in ₹ | ||||||
| 2 | Salesman No. | Qtr 1 | Qtr 2 | Qtr 3 | Qtr 4 | Total Sales | Commission @ 10% of sales (₹) |
| 3 | S1 | 6,000 | 7,000 | ?? | 9,000 | ||
| 4 | S2 | 8,000 | 9,000 | 8,200 | 8,500 | 33,700 | |
| 5 | S3 | 9,600 | 8,400 | 9,200 | 9,500 | 36,700 | ?? |
| 6 | S4 | ?? | 7,600 | 8,000 | 12,000 | ||
| 7 | Total | ||||||
Based on the above transactions and the information given in the spreadsheet, answer the following question:
- Write the formula to calculate the cost of the goods sold by Salesman No. S2 in Qtr 2, if he had sold the goods at a profit of 10% of the sales.
- Write the formula to calculate the sales made by Salesman No. S2 in Qtr 3 in cell D3, if he had sold the goods at a profit of 10% of the cost.
- In Qtr 1, Salesman No. S4 sold goods costing ₹ 8,800 at a loss of 10% of the sales. What is the selling price of the goods in cell B6.
- The company gives a commission of 10% on its total sales. Write the formula to calculate the commission earned by Salesman No. S3 in cell G5.
Concept: Activity Ratios >> Inventory Turnover Ratio
