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Question 26 of 50
Q.

(a) From the following particulars calculate total purchases.

Particulars₹
Sundry creditors on 1st April, 201775,000
Bills payable on 1st April, 201760,000
Paid cash to creditors3,70,000
Paid for bills payable1,00,000
Purchases returns15,000
Cash purchases3,20,000
Creditors on 31st March, 201850,000
Bills payable on 31st March, 201880,000

OR

(b) From the following Balance Sheet of Arunan Ltd. as on 31.03.2019. Calculate

  1. Debt-equity ratio
  2. Proprietary ratio and
  3. Capital gearing ratio
Particulars₹
I. Equity and Liabilities
1. Shareholder's funds
(a) Share capital — Equity share capital1,50,000
8% preference share capital2,00,000
(b) Reserves and surplus1,50,000
2. Non-current liabilities — Long-term borrowings (9% Debentures)4,00,000
3. Current liabilities — (a) Short-term borrowings from banks25,000
(b) Trade payables75,000
Total10,00,000
II. Assets
1. Non-current assets — Fixed Assets7,50,000
2. Current assets — (a) Inventories1,20,000
(b) Trade receivables1,00,000
(c) Cash and cash equivalents27,500
(d) Other current assets — Expenses paid in advance2,500
Total10,00,000
Puducherry TnboardTamil Nadu HSC (DGE) Commerce Board 2022Subjective· 5mImportance★★★★★
52% · 26/50 Questions
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(a) Bills accepted = ₹1,20,000 (from Bills Payable A/c); credit purchases = ₹4,80,000 (from Total Creditors A/c); total purchases = ₹8,00,000. (b) For Arunan Ltd. — Debt-equity 0.8:1, Proprietary 0.5:1, Capital gearing 2:1.

(a) Calculation of Total Purchases

Step 1 — Find bills accepted during the year (Bills Payable Account)

Dr₹Cr₹
To Cash (B/P paid)1,00,000By Balance b/d60,000
To Balance c/d80,000By Sundry creditors (bills accepted — bal. fig.)1,20,000
1,80,0001,80,000

Bills accepted during the year = ₹1,20,000.

Step 2 — Find credit purchases (Total Creditors Account)

Dr₹Cr₹
To Cash (paid to creditors)3,70,000By Balance b/d75,000
To Purchases returns15,000By Credit purchases (bal. fig.)4,80,000
To Bills payable (bills accepted)1,20,000
To Balance c/d50,000
5,55,0005,55,000

Credit purchases = ₹4,80,000.

Step 3 — Total purchases

Particulars₹
Credit purchases4,80,000
Add: Cash purchases3,20,000
Total purchases8,00,000

OR (b) Ratios of Arunan Ltd. (as on 31.03.2019)

First gather the components:

  • Shareholders' funds = Equity share capital 1,50,000 + 8% Preference share capital 2,00,000 + Reserves & surplus 1,50,000 = ₹5,00,000
  • Long-term debt = 9% Debentures = ₹4,00,000
  • Total assets = ₹10,00,000
  • Equity shareholders' funds = Equity share capital 1,50,000 + Reserves & surplus 1,50,000 = ₹3,00,000 …
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