NCERT · Class 12 · Accountancy

Unit 5: Accounting Ratios

Practice each question, then open the answer or worked solution.

Numerical Questions for NCERT Accountancy Solutions Part 2 Class 12 Chapter 5

22 questions

Q1Written answer

Following is the Balance Sheet of Raj Oil Mills Limited as at March 31, 2017. Calculate Current Ratio.

Particulars	(₹)
I. Equity and Liabilities:
1. Shareholders’ funds
a) Share capital	7,90,000
b) Reserves and surplus	35,000
2. Current Liabilities
a) Trade Payables	72,000
Total	8,97,000
II. Assets
1. Non-current Assets
a) Fixed assets
Tangible assets	7,53,000
2. Current Assets
a) Inventories	55,800
b) Trade Receivables	28,800
c) Cash and cash equivalents	59,400
Total	8,97,000

NCERT Act Class 12 Chp 5-26

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Worked solution

Current Assets = Inventories +Trade Receivables + Cash

= 55,800 + 28,800 + 59,400

= ₹ 1, 44,000

Current Liabilities = Trade Payables = ₹ 72,000

Q2Written answer

Following is the Balance Sheet of Title Machine Ltd. as at March 31, 2017.

Particulars	Amount ₹.
I. Equity and Liabilities
1. Shareholders’ funds
a) Share capital	24,00,000
b) Reserves and surplus	6,00,000
2. Non-current liabilities
a) Long-term borrowings	9,00,000
3. Current liabilities
a) Short-term borrowings	6,00,000
b) Trade payables	23,40,000
c) Short-term provisions	60,000
Total	69,00,000
II. Assets
1. Non-current Assets
a) Fixed assets
Tangible assets	45,00,000
2. Current Assets
a) Inventories	12,00,000
b) Trade receivables	9,00,000
c) Cash and cash equivalents	2,28,000
d) Short-term loans and advances	72,000
Total	69,00,000

Calculate Current Ratio and Liquid Ratio.

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Worked solution

1. Current Ratio

NCERT Act Class 12 Chp 5-27

Current Assets = Inventories +Trade Receivables + Cash + Short term Loans and Advances

= 12, 00,000 + 9, 00,000 + 2, 28,000 + 72,000

= ₹ 24, 00,000

Current Liabilities = Trade Payables + Short-term Borrowings + Short-term Provisions

= 23, 40,000 + 6, 00,000 + 60,000

= ₹ 30, 00,000

2. Quick Ratio

NCERT Act Class 12 Chp 5-28

Quick Assets = Trade Receivables + Cash + Short term Loans and Advances

= 9, 00,000 + 2, 28,000 + 72,000

= ₹ 12, 00,000

Q3Written answer

Current Ratio is 3.5:1. Working Capital is ₹ 90,000. Calculate the amount of Current Assets and Current Liabilities.

NCERT Act Class 12 Chp 5-29

NCERT Act Class 12 Chp 5-30

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Worked solution

or, Current Assets = 3.5 Current Liabilities (1)

Working Capital = Current Assets − Current Liabilities

Working Capital = 90,000

or, Current Assets − Current Liabilities = 90,000

or, 3.5 Current Liabilities − Current Liabilities = 90,000 (from 1)

or, 2.5 Current Liabilities = 90,000

NCERT Act Class 12 Chp 5-31

NCERT Act Class 12 Chp 5-32

Q4Written answer

Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the inventory is 36,000, calculate current liabilities and current assets.

NCERT Act Class 12 Chp 5-33

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Worked solution

or,
NCERT Act Class 12 Chp 5-34

or, 4.5 Current Liabilities = Current Assets

NCERT Act Class 12 Chp 5-35

or,
NCERT Act Class 12 Chp 5-36

or, 3 Current Liabilities = Quick Assets

Quick Assets = Current Assets − Inventory = Current Assets − 36,000Quick Assets = Current Assets – Inventory = Current Assets – 36,000

Current Assets − Quick Assets = 36,000

or, 4.5 Current Liabilities − 3 Current Liabilities = 36,000

or, 1.5 Current Liabilities = 36,000

or, Current Liabilities = 24,000

Current Assets = 4.5 Current Liabilities

NCERT Act Class 12 Chp 5-37

Q5Written answer

Current liabilities of a company are ₹ 75,000. If current ratio is 4:1 and liquid ratio is 1:1, calculate value of current assets, liquid assets and inventory.

NCERT Act Class 12 Chp 5-38

NCERT Act Class 12 Chp 5-39

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Worked solution

Or, 4 × 75,000 = Current Assets

Or, Current Assets = 3, 00,000

NCERT Act Class 12 Chp 5-40

Or,
NCERT Act Class 12 Chp 5-41

Liquid Assets = 75,000

Inventory = Current Assets − Liquid Assets

= 3, 00,000 − 75,000

= 2, 25,000

Q6Written answer

Handa Ltd. has inventory of ₹ 20,000. Total liquid assets are ₹ 1, 00,000 and quick ratio is 2:1. Calculate current ratio.

NCERT Act Class 12 Chp 5-42

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Worked solution

or,
NCERT Act Class 12 Chp 5-43

NCERT Act Class 12 Chp 5-45

Current Assets = Liquid Assets + Inventory

= 1, 00,000 + 20,000

= 1, 20,000

NCERT Act Class 12 Chp 5-46

Q7Written answer

Calculate debt equity ratio from the following information:

	₹
Total Assets	15,00,000
Current Liabilities	6,00,000
Total Debts	12,00,000

NCERT Act Class 12 Chp 5-48

NCERT Act Class 12 Chp 5-49

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Worked solution

Long Term Debts = Total Debts − Current Liabilities

NCERT Act Class 12 Chp 5-50

Or,
NCERT Act Class 12 Chp 5-51

Q8Written answer

Calculate Current Ratio if:

Inventory is ₹ 6, 00,000; Liquid Assets ₹ 24, 00,000; Quick Ratio 2:1.

NCERT Act Class 12 Chp 5-52

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Worked solution

Or,
NCERT Act Class 12 Chp 5-53

NCERT Act Class 12 Chp 5-54

Current Assets = Liquid Assets + Inventory

NCERT Act Class 12 Chp 5-55

Q9Written answer

Compute Stock Turnover Ratio from the following information:

	₹
Net Revenue from Operations	2,00,000
Gross Profit	50,000
Inventory at the end	60,000
Excess of inventory at the end over inventory in the beginning	20,000

NCERT Act Class 12 Chp 5-55

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Worked solution

Solution coming soon.

Q10Written answer

Calculate following ratios from the following information:

(i) Current ratio (ii) Acid test ratio (iii) Operating Ratio (iv) Gross Profit Ratio

	₹
Current Assets	35,000
Current Liabilities	17,500
Inventory	15,000
Operating Expenses	20,000
Revenue from Operations	60,000
Cost of Goods Sold	30,000

NCERT Act Class 12 Chp 5-56

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Worked solution

iv)

NCERT Act Class 12 Chp 5-57

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Unit 5: Accounting Ratios

Numerical Questions for NCERT Accountancy Solutions Part 2 Class 12 Chapter 5