1.

From the following details make out the Balance Sheet with as many details
as possible:
Stock velocity 6
Capital Turnover Ratio 2
Fixed Assets Turnover 4
Gross Profit Turnover 20%
Debtors Velocity 2 months
Creditors Velocity 73 days
The GP was Rs.60000, Res and Surplus Rs.20000.
Closing Stock was Rs.5000 in excess of the Opening stock

2.The following information is given about X ltd., for the year ended 31 Mar., 2010
Stock Turnover 6 times
GP Ratio 20% on Sales
Sales for the year 300000
Closing stock is Rs.10000 more than the Opening stock
Opening Creditors 20000
Closing Creditors 30000
Trade Debtors at the end 60000
Net Working Capital 50000
Find out: a) Average Stock d) Average Payment Period
b) Purchases e) Average Collection Period
c) Creditors Turnover ratio f) Working Capital Turnover ratio

Rules of Accounting

Basic Accounting Assumptions

Usefulness of Ratios-Discuss

Ratios are indicators or pointers but by themselves not decision making tools-Discuss

Activity ratios indicate the efficiency level of the Companies operatios-discuss

Bankers look for Current ratio / interest coverage and DSCR- Discuss
 GP 60000
Sales 300000 Capital
C of G Sold 240000 R and S
Stock velocity 6 Creditors
Average stock 40000
Closing stock 42500
Opening Stock 37500
Capital employed 150000
FA 60000
Debtors 50000
Purchases 245000
Creditors 49000

Sales 300000 GP 60000

C of G Sold 240000
a Average Stock 40000
Opening Stock 35000
Closing Stock 45000
b Purchases 250000
Average Creditors 25000
c Creditors T/o 10 times
d Avg Payt Period 1.2 months
e Avg Colln Period 2.4 months
f WC T/o 6 times
130000 FA 60000
20000 Debtors 50000
49000 Closing Stock 42500
Cash 46500

199000 199000