## Questions for Accountancy Practical (2020)

Questions for Accountancy Practical
Ratio Analysis
No. Questions M.M.
Q1. The current ratio of a company is 2 : 1. What will be the effect of the following transactions on this ratio?

(a) Purchased goods on credit;

(b) Sale of a Machine (Book value: ₹ 4,000) for ₹ 3,000 only;

(c) Sale of merchandise (goods) costing ₹ 10,000 for ₹ 11,000.

3
Q2. Current liabilities of a company are ₹ 3,60,000, current ratio is 2.5:1 and quick ratio is 2:1. Find the value of Inventories. 3
Q3. Current ratio is 4:1, quick ratio 3:1.Inventory ₹ 36,000. What will be the effect of increase in inventory to ₹56,000 on the liquidity of the company. 6
Q4. Current assets of a company are ₹5,00,000. Current ratio is 2.5:1 and Liquid ratio is 1:1. Calculate the value of liquid assets and inventories. 3
Q5. Current Ratio is 3.5 : 1. Working Capital is ₹90,000. What will be the amount of Working Capital if Current assets are increased by ₹20,000. 1
Q6. Sucheta Ltd. has a current ratio 4.5 : 1 and quick ratio 3 : 1; if the inventory is ₹36,000, calculate its Working Capital. 3
Q7. Current Liabilities of a company are ₹75,000. If current ratio is 3:1 and Liquid Ratio is 1 : 1, calculate Working Capital and Inventory. 3
Q8. Harman Ltd. has inventory of ₹ 20,000. Liquid assets are ₹ 1,20,000 and quick ratio is 2 : 1. Calculate current ratio and Working Capital. 3
Q9. What will be the effect of ‘The payment of Dividend ₹40,000’ on the Debt-equity ratio of a company having: Total Assets ₹15,00,000, Current Liabilities ₹6,00,000, Total Debts ₹12,00,000. 3
Q10. What will be the effect of ‘Payment of Dividend ₹ 30,000’ on the Current Ratio of a company having: Inventory ₹ 6,00,000; Liquid Assets ₹24,00,000; Quick Ratio 2 : 1. 3
Q11. Compute Inventory 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. 3
Q12. Calculate following ratios from the following information:

(a) Liquid ratio (b) Operating Ratio (c) 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 Revenue from operation ₹ 30,000.

3
Q13. From the following information calculate:

(a) Gross Profit Ratio (b) Inventory Turnover Ratio (3) Current Ratio (4) Liquid Ratio (5) Net Profit Ratio (6) Working Capital Ratio:

Revenue from Operations ₹ 25,20,000, Net Profit ₹ 3,60,000, Cost of Revenue from Operations ₹19,20,000, Long-term Debts ₹ 9,00,000, Trade Payables ₹2,00,000, Average Inventory ₹ 8,00,000, Current Assets ₹ 7,60,000, Fixed Assets ₹ 14,40,000, Current Liabilities ₹ 6,00,000, Net Profit before Interest and Tax ₹ 8,00,000.

6
Q14. Compute Gross Profit Ratio, Working Capital Turnover Ratio and Debt Equity Ratio from the following information:

Paid-up Share Capital ₹5,00,000, Current Assets ₹4,00,000, Revenue from Operations ₹10,00,000, 11% Debentures ₹ 2,00,000, Current Liabilities ₹ 2,80,000 ,Cost of Revenue from Operations ₹6,00,000.

6
Q15. Calculate Inventory Turnover Ratio if:

Inventory in the beginning ₹ 76,250, Inventory at the end ₹ 98,500, Gross Revenue from Operations ₹ 5,20,000, Sales Return ₹ 20,000, Purchases ₹ 3,22,250.

3
Q16. Calculate Inventory Turnover Ratio from the data given below:

Inventory in the beginning of the year ₹ 10,000, Inventory at the end of the year ₹ 5,000, Carriage ₹ 2,500, Revenue from Operations ₹ 50,000, Purchases ₹ 25,000

3
Q17. The debt equity ratio of X Ltd. is 2 : 1. Which of the following would increase/decrease or not change the debt equity ratio?

(a) Issue of preference shares, ₹10,000.

(b) Cheque received from debtors, ₹5,000.

(c) Purchase of goods on cash basis, ₹2,000.

3
Q18. From the following details, calculate interest coverage ratio:

Net Profit after tax ₹ 60,000; 15% Long-term debt ₹10,00,000; and Tax rate

40%. What would be the effect of increase in Tax Rate by 10%, on this ratio?

3
Q19. From the following information, calculate inventory turnover ratio :

Inventory in the beginning ₹18,000, Inventory at the end ₹22,000, Net purchases ₹50,000, Wages ₹ 14,000, Revenue from operations ₹ 80,000.

3
Q20. From the following information, calculate inventory turnover ratio:

Revenue from operations ₹4,00,000, Average Inventory ₹55,000, Gross Profit Ratio is 10%.

3
Q21. A trader carries an average inventory of ₹ 40,000. His inventory turnover ratio is 8 times, If he sells goods at a profit of 20% on Revenue from operations, find out the gross profit. 3
Q22. Calculate the amount of gross profit: Average inventory ₹80,000, Inventory turnover ratio is 6 times, Selling price  is 25% above cost. 3
Q23. Calculate Inventory Turnover Ratio: Annual Revenue from operations ₹2,00,000, Gross Profit is 20% on cost of Revenue from operations, Inventory in the beginning ₹ 38,500, Inventory at the end ₹ 41,500. 3
Q24. Calculate the Trade receivables turnover ratio from the following information: Total Revenue from operations ₹ 4,00,000, Cash Revenue from operations 20% of Total Revenue from operations, Trade receivables as at 1.4.2018 ₹ 40,000, Trade receivables as at 31.3.2019 ₹ 1,20,000. 3
Q25. Calculate the Trade payables turnover ratio from the following figures:

Credit purchases during 2018-19 ₹12,00,000, Creditors on 1.4.2018 ₹3,00,000, Bills Payables on 1.4.2018 ₹ 1,00,000, Creditors on 31.3.2019 ₹1,30,000, Bills Payables on 31.3.2019 ₹ 70,000.

3
Q26. From the following information, calculate –

(a) Trade receivables turnover ratio, (b) Average collection period

Information given : Revenue from Operations ₹8,75,000, Creditors ₹90,000, Bills receivable ₹48,000, Bills payable ₹52,000, Purchases ₹4,20,000, Trade debtors ₹59,000.

3
Q27. Calculate gross profit ratio from the following information for the year 2018-19, Revenue from Operations: Cash ₹25,000, Credit ₹75,000, Purchases : Cash ₹15,000, Credit ₹60,000, Carriage Inwards ₹2,000, Salaries ₹25,000, Decrease in Inventory ₹10,000, Return Outwards ₹2,000, Wages ₹5,000. 3
Q28. Given the following information:

Revenue from Operations ₹3,40,000, Cost of Revenue from Operations ₹1,20,000, Selling Expenses ₹80,000, Administrative Expenses ₹40,000

Calculate Gross profit ratio and Operating ratio.

3
Q29. Gross profit ratio of a company was 25%. Its credit revenue from operations was, ₹20,00,000 and its cash revenue from operations was 10% of the total revenue from operations. If the indirect expenses of the company were ₹50,000, calculate its net profit ratio. 3
Q30. Following information is given by a company from its books of accounts as on March 31, 2019:

Inventory ₹1,00,000, Total Current Assets ₹1,60,000, Shareholders’ funds ₹4,00,000, 13% Debentures ₹3,00,000, Current liabilities ₹1,00,000, Net Profit Before Tax ₹3,51,000, Cost of revenue from operations ₹5,00,000

Calculate: (a) Current Ratio, (b) Inventory Turnover Ratio,(c) Debt Equity Ratio.

3
Q31. The current ratio is 2.5 : 1. Current assets are ₹ 50,000 and current liabilities are ₹ 20,000. How much must be the decline in current assets to bring the ratio to 2 : 1? 3
Q1. Cheten Ltd., made a profit of ₹ 1,00,000 after charging depreciation of ₹ 20,000 on assets and a transfer to general reserve of ₹ 30,000, the goodwill amortised was ₹ 7,000 and gain on sale of machinery was ₹ 3,000, trade receivables showed an increase of ₹ 3,000; trade payables an increase of ₹ 6,000; prepaid expenses an increase of ₹ 2000; and outstanding expenses a decrease of ₹ 2,000.

Ascertain cash flow from operating activities.

3
Q2. Mugdha Ltd. has given you the following information:

Machinery as on April 01, 2018, ₹ 80,000

Machinery as on March 31, 2019, ₹ 65,000

Accumulated Depreciation on April 01, 2018, ₹ 23,000

Accumulated Depreciation on March 31, 2019, ₹ 13,000

During the year, Machine costing ₹ 25,000 in respect of which Depreciation of ₹ 5,000 had been written off, was sold for ₹ 13,000.

Calculate cash flow from Investing Activities on the basis of the above information.

3
Q3.

From the following information, calculate cash flows from financing activities:

 Items 31.03.2018(₹) 31.03.2019(₹) 9% Debentures 3,00,000 3,50,000 Long-term Loans 2,00,000 1,50,000

During the year, the company repaid a loan of ₹ 1,00,000.

3
Q4. From the following particular, calculate cash flows from investing activities:

 Items Purchased(₹) Sold(₹) Plant 4,50,000 80,000 Investment 1,80,000 1,20,000 Goodwill 2,00,000 nil Patents nil 1,00,000

Interest received on debentures held as investment ₹ 50,000.

Dividend received on shares held as investment ₹ 15,000.

A plot of land had been purchased for investment purposes and was let out for commercial use and rent received ₹20,000.

3
Q5. From the following Information, calculate cash flows from investing and financing activities:

 Particular 31.03.2018(₹) 31.03.2019(₹) Machine at cost Accumulated Depreciation Equity Shares Capital Bank Loan 5,00,000 3,00,000 28,00,000 12,50,000 9,00,000 4,50,000 35,00,000 7,50,000

During the year, machine costing ₹ 2,00,000 was sold at a profit of ₹ 1,50,000, Depreciation charged on machine during the year amounted to ₹ 2,50,000.

3
Q6. Angad Ltd., arrived at a net income of ₹ 5,00,000 for the year ended March 31, 2019. Depreciation for the year was ₹ 2,00,000. There was a profit of ₹ 50,000 on assets sold which was transferred to Statement of Profit and Loss account. Trade Receivables increased during the year ₹ 40,000 and Trade Payables also increased by ₹ 60,000. Compute the cash flow from operating activities by the indirect approach. 3
Q7. For each of the following transactions, calculate the resulting cash flow and state the nature of cash flow, viz., operating, investing and financing.

(a) Acquired machinery for ₹ 2,50,000 paying 20% by cheque and executing a bond for the balance payable.

(b) Paid ₹ 2,50,000 to acquire shares in InfoTech. Ltd. and received a dividend of ₹ 50,000 after acquisition.

(c) Sold machinery of original cost ₹ 2,00,000 with an accumulated depreciation of ₹ 1,60,000 for ₹ 60,000.

3
Q8. Compute net cash from operations for the year ended March 31, 2019, if Statement of Profit and Loss of a company for the year ended March 31, 2019, disclosed Profit before tax ₹1,50,000 and following Additional information is provided to you:

(a) Trade receivables decrease by ₹ 30,000 during the year.

(b) Prepaid expenses increase by ₹ 5,000 during the year.

(c) Trade payables increase by ₹ 15,000 during the year.

(d) Outstanding expenses payable increased by ₹ 3,000 during the year.

(e) Other expenses included depreciation of ₹ 25,000.

3
Q9. Compute cash from operations from the following figures:

(a) Profit for the year 2018-18 is, ₹10,000 after providing for depreciation of ₹ 2,000.

(b) The current assets and current liabilities of the business for the year ended March 31, 2018 and 2019 are as follows:

 Particulars 31.03.2018(₹) 31.03.2019(₹) Trade Receivables Provision for Doubtful Debts Trade Payables Inventories Other Current Assets Expenses payable Prepaid Expenses Accrued Income Income received in advance 14,000 1,000 13,000 5,000 10,000 1,000 2,000 3,000 2,000 15,000 1,200 15,000 8,000 12,000 1,500 1,000 4,000 1,000
3
Q10. From the following Information, calculate cash flows from financing activities:

 Particular 2018(₹) 2019(₹) Equity Shares Capital Bank Loan Proposed Dividend 5,00,000 3,00,000 60,000 7,00,000 4,50,000 70,000
2
Q11. From the following Information, calculate cash flows from financing activities:

 Particular 2018(₹) 2019(₹) Equity Shares Capital Bank Loan Proposed Dividend 5,00,000 3,00,000 50,000 7,00,000 4,50,000 65,000

During the year ended 31st March,2019,an Interim dividend was paid ₹25,000.

3
Q12. From the following Information, calculate cash flows from financing activities:

 Particular 2018(₹) 2019(₹) Equity Shares Capital 10% Debentures Proposed Dividend 5,00,000 3,00,000 50,000 7,00,000 4,50,000 65,000

(a)Debentures were issued on 31.10.2018

(b)During the year ended 31st March,2019,an Interim dividend was paid ₹25,000.

3
Q13. From the following Information, calculate cash flows from financing activities:

 Particular 2018(₹) 2019(₹) Equity Shares Capital Bank Loan Proposed Dividend 5,00,000 3,00,000 50,000 7,00,000 4,50,000 65,000

During the year ended 31st March,2019,an Interim dividend was paid 25,000.

3
Q14. From the following Information, calculate cash flows from financing activities:

 Particular 2018(₹) 2019(₹) Equity Shares Capital 9% Debentures Proposed Dividend 4,00,000 3,00,000 50,000 5,00,000 4,50,000 60,000

During the year ended 31st March,2019, Dividend was paid ₹35,000.

3

Q1 The Second Quarter Report of a company gives following information about Segment Performance:

 Segment Sales(₹) Net Profit(₹) Clothes 10,00,000 4,00,000 Machine 30,00,000 6,00,000 Footwear 16,00,000 6,00,000

Using Ratio Analysis, comment on the following:(a) Which is the best segment? (b) If the company has to discontinue one segment, which segment should be discontinued?

4
Q2 The Third Quarter Report of a Company gives following information about Segment Performance:

 Segment Segment Sales(₹) Net Profit(₹) Water Purifier 20,00,000 4,00,000 Air Purifier 30,00,000 8,00,000 Fashion Accessories 40,00,000 6,00,000

From the above data, find out which is the best segment and which segment should be discontinued if the company has to discontinue one segment.

4
Q3 The Quarterly Report of a company gives the following information about its Sales Revenue and Net Profit for the second quarter of the current year and the second quarter of the previous year:

 Particulars QuarterII,2018-19(₹) Quarter II,2017-18(₹) Sales Revenue 16,00,000 13,00,000 Net Profit 3,80,000 3,00,000

Which quarter is performing better? Has the performance improved? Comment using ratios as tools of your analysis.

3
Q4 From the following particulars regarding Segment A and Segment B of a Company, You are required to comment on their efficiency  in collection from debtors ?

 Particulars Segment A(₹) Segment B(₹) Opening bal. of  trade receivables 25,000 Nil Closing bal. of trade receivables 12,000 30,000 Credit Revenue from Operations 1,20,000 2,40,000
3
Q5 The Third Quarter report of a company gives following information about the performance of different segments:

 Segment Revenue from Operations(₹) Net Profit(₹) Bags 20,00,000 3,50,000 Shoes 30,00,000 4,50,000 Garments 40,00,000 4,00,000 Stationery 50,00,000 8,00,000

Find out which product should be discontinued.

5
Q6 The fourth quarter report of a company gives following information about the performance of different segments:

 Segment Rev. from Operations(₹) Gross Profit(₹) Product E 20,00,000 3,50,000 Product F 30,00,000 5,00,000 Product G 40,00,000 6,50,000 Product H 50,00,000 8,00,000

Find out which segment is the best .

5
Q7 Given the following information relating to two segments X and Y ,of a company, comment on the profitability of the two segments. Which segment is performing better?

 Particulars Segment X(₹) Segment Y(₹) Revenue from Operations 3,40,000 4,20,000 Cost of Rev. from Operations 1,20,000 2,60,000 Selling expenses 80,000 40,000 Administrative Expenses 40,000 30,000

6

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