**CBSE Class 12 Accountancy Chapter 13 Important Questions – Free PDF Download**

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**CBSE Class 12 Accountancy Important Questions Chapter 13 Accounting Ratios**

**1: Working Capital Rs. 36,000; Current Ratio 2.8:1; Inventory Rs. 16,000. Calculate Current Assets, Current Liabilities and Quick Ratio.**

**Solution :**

Current Ratio = =

Let the Current Liabilities be Rs. X

The Current Assets will be Rs. 2.8X

Working Capital = Current Assets – Current Liabilities

36,000 = 2.8X – X = 1.8 X

X = = Rs. 20,000

Quick Ratio =

Liquid Assets = Current Assets – Inventory

Rs. 56,000 – 16,000 = Rs. 40,000

Quick Ratio = = 2:1

**2: Current Assets of a company are Rs. 15,00,000. Its current ratio 2.5 and liquid Ratio is 0.85. Calculate Current liabilities, Liquid Assets and Inventory.**

**Solution :**

Current Ratio =

2.5=

Current Liabilities = = Rs. 6,00,000

Liquid Ratio =

0.85 =

Liquid Assets = = Rs. 5,10,000

Inventory = Current Assets – Liquid Assets

= Rs. 15,00,000 – Rs. 5,10,000

= Rs. 9,90,000

**3: Calculate ‘Debt-Equity Ratio’ from the following information:**

**Total Assets : Rs. 3,50,000**

**Total Debt : Rs. 2,50,000**

**Current Liabilities : Rs. 80,000**

**Solution :**

Debt Equity Ratio =

Debt = Total Debt – Current Liabilities

= Rs. 2,500,000-Rs. 80,000 = Rs. 1,70,000

Equity = Total Assets – Total Debts

= Rs. 3,50,000 – Rs. 2,50,000 = Rs. 1,00,000

Debt – Equity Ratio = = 1.7:1

**4: ****From the following information calculate Proprietary Ratio and Total Assets to Debt Ratio**

**Balance Sheet of ABC Ltd.**

**As at**

Particulars | Note No. | Figure for Current Years (Rs.) |

1. EQUITY AND LIABILITIES (1) Shareholders’ funds (a) Share capital (b) Reserves and surplus (2) Non-current Liabilities Long-term borrowings (3) Current liabilities Trade payables Total | 4,50,000 1,80,000 75,000 45,000 | |

7,50,000 | ||

II. ASSETS (1)Non-current assets (a)Fixed assets (b)Non-current investments (2)Current Assets Inventories Total | 2,25,000 1,50,000 | |

7,50,000 |

**Solution :**

Proprietary Ratio =

Shareholders’ Funds = Share Capital + Reserves and Surplus = Rs. 4,50,000+Rs.1,80,000 = Rs. 6.30.000

Proprietary Ratio = = 0.84 : 1

Total Assets to Debt Ratio =

= = 10

Total Assets to Debt Ratio = 10 : 1

**5: Calculate Interest Coverage Ratio from the following information**

**Net Profit (after taxes) = Rs. 1,00,000**

**Fixed interest charges on long term borrowing = Rs. 20,000**

**Rate of Income Tax 50%**

**Solution :**

Interest Coverage Ratio =

Interest Coverage Ratio =

= = 11 Times

**6: From the following information calculate interest coverage ratio:**

**Rs.**

**10,000 equity shares to Rs. 10 each 1,00,000**

**8% Preference Shares 70,000**

**10% Debentures 50,000**

**Long term Loans from Banks 50,000**

**Interest on longs term loans from bank 5,000**

**Profit after tax 75,000**

**Tax 9,000**

**Solution :**

Interest Coverage Ratio = = Rs. 5000

Profit before Interest & Tax = Profit after tax + Interest on debentures + Interest Long term Loans

= Rs. 75,000+9,000+5000+5000 = Rs. 94,000

Interest Coverage Ratio =

= = 9.4 Times

**7: For the following information compute Debt-Equity Ratio :**

**Rs.**

**Long term borrowing 8,00,000**

**Long term provisions 4,00,000**

**Current Liabilities 2,00,000**

**Non Current Assets 14,40,000**

**Current Assets 3,60,000**

**Solution :**

Debt Equity Ratio =

Debt = Long term borrowing + Long term Provision

= Rs. 8,00,000+4,00,000

= Rs. 12,00,000

Equity = Non Current Assets + Current Assets – Debt – Current Liabilities

= Rs. 14,40,000+360,000-12,00,000-2,00,000

= Rs. 18,00,000-14,00,000

= Rs. 4,00,000

Debt Equity Ratio = = 3 : 1

**8: Cost of Revenue from Operations is Rs. 5,00,000. The opening stock is Rs. 40,000 and the closing stock is Rs. 60,000 (at cost). Calculate inventory turnover ratio.**

**Solution :**

Inventory Turnover Ratio =

Average Stock =

= Rs. 40,000+= Rs. 50,000

Inventory Turnover Ratio = **=** 10 Times

**9: ****Cost of Revenue from operation = Rs. 2,00,000**

**Inventory Turnover Ratio = Rs. 8 Times**

**Inventory in the beginning is 1.5 times more than the inventory at the end.**

**Calculate values of opening and closing inventory.**

**Solution :**

**8 = **

Average Inventory =

Average Inventory = Rs. 25,000 =

Opening Inventory +Closing Inventory

=

= Rs. 50,000

Let the closing Inventory = x

Then opening Inventory will be = x+1.5x = 2.5x

Hence, x+2.5x = 50000

3.5x = 50,000

X =

Closing Inventory = Rs. 14,286

Opening Inventory= = Rs. 35,714

**10: Calculate Debtors Turnover Ratio if Closing Debtors are Rs. 40,000; Opening Debtors Rs. 60,000; Cash Sales is 25% of Credit Sales and Total Sales are Rs. 2,00,000.**

**Solution :**

Debtors Turnover Ratio =

Cash Sales = 25% of Credit Sales

Let the Credit Sales be Rs. X

Then Cash Sales is 25% of X

=

Total Sales = Cash Sales + Credit Sales

=

Rs. 2,00,000

=

X = Credit Sales

=

Average Debtors

=

Debtors Turnover Ratio

=

**11: Compute Working Capital Turnover Ratio from the following information:**

**Rs.**

**Cash Sales 1,30,000**

**Credit Sales 3,80,000**

**Sales Return 10,000**

**Liquid Assets 1,40,000**

**Inventory 90,000**

**Current Liabilities 1,05,000**

**Solution:**

Working Capital Turnover Ratio

=

Net Sales = Cash Sales + Credit Sales – Sales Return

= 1,30,000+3,80,000-10,000 = Rs. 5,00,000

Working Capital = Current Assets – Current Liabilities

Current Assets = Liquid Assets + Inventory

= 1,40,000+90,000 = Rs. 2,30,000

Working Capital = 2,30,000 – 1,05,000 = Rs. 1,25,000

Working Capital Turnover Ratio

=

**12: Calculate ‘Gross Profit Ratio’ from the following information:**

**Rs.**

**Net Revenue from Operations 80,000**

**Cost of Revenue from Operations 60,000**

**Operating Expenses 10,000**

**Indirect Expenses 60,000**

**Solution :**

Gross Profit Ratio =

= Rs. 80,000-60,000 = Rs. 20,000

**13: Calculate ‘Operating Profit Ration’ and ‘Operating Ratio’ from the following information:**

**Rs.**

**Net Revenue from Operations80,000**

**Cost of Revenue from Operations60,000**

**Operating Expenses10,000**

**Indirect Expenses60,000**

**Solution :**

Operating profit Ratio =

Operating profit = Net Revenue from Operation – Operating Cost

Operating Cost = Cost of Revenue from Operation + Operating Expenses

= Rs. 60,000+10,000 = Rs. 70,000

Operating profit =80,000 -70,000 = Rs. 10,000

Operating profit Ratio =

Operating Ratio =

=

**14: Calculate ‘Net Profit ration’ from the following Information:**

**Rs.**

**Net Revenue from Operations 80,000**

**Cost of Revenue from Operations 60,000**

**Operating Expenses 10,000**

**Indirect Expenses 6,000**

**Indirect Income 4,000**

**Solution :**

Net Profit Ratio =

**Net Profit =** Net Revenue from Operations – Cost of Revenue from operation Operating Expenses – Indirect Expenses + Indirect Income

= Rs. 80,000 – 60,000 – 10,000 – 6,000 + 4,000 = 8,000

Net profit Ratio =

=

**15: Calculate ‘Return on Investment’ with the following information:**

**Rs.**

**Net Profit after interest and Tax2,10,000**

**Rate of income Tax30%**

**Shareholders’ Funds13,00,000**

**12% Long term Debts1,00,000**

**10% Debentures2,00,000**

**Solution :**

Retrun on Investment =

Profits before Tax

=

=

Profits before Interest, Tax and Dividend = Profits before Tax + Interest on Long Debts + Intere3st on Debentures = 3,00,000 +12,000 + 20,000 = 3,32,000.

Capital Employed = Shareholders’ Funds + 12% Long term debts + 10%

Debentures = 13,00,000 +1,00,000 +2,00,000 = 16,00,000.

Returns on Investment

=

**16 : The Quick ratio of X Ltd. Is 1:1. State with reason which of the following transactions would (i) increase; (ii) decrease or (iii) not change the ratio:**

**1. Included in the trade payable was a Bill payable of Rs. 3,000 which was met on maturity .**

**2. Debentures of Rs. 50,000 were converted into Equity Shares.**

**Solution:**

**(1) No Change**

**Reason: **Both current Assets and current Liabilities are decreasing with the same amount.

**(2) No Change**

**Reason: **Neither current Assets and current Liabilities are decreasing with the same amount.

**17: Calculate ‘Return on Investment’ and ‘Debt-Equity Ratio’ from the following information:**

**Rs.**

**Net Profit after interest and Tax 6,00,000**

**10 % Debentures 10,00,000**

**Tax Rate40 %**

**Capital Employed 80,00,000**

**Solution:**

Retrun on Investment =

Net Profits before Tax

=

=

Interest on 10 % Debentures

=

Net Profit before Interest and Tax = Rs. 10,00,000 + Rs. 1,00,000 = Rs. 11,00,000

Return on Investment

=

Debt – Equity Ratio

=

Equity = Capital Employed – Debt

= Rs. 80,00,000 – 10,00,000 = Rs. 70,00,000.

Debt Equity Ratio

=

= 0.14:1

**18: Complete the Balance Sheet of Raj Ltd. From the following information :**

**Balance Sheet**

**As at 31st March, 2015**

Particulars | Note No. | Amount (Rs.) |

1. EQUITY AND LIABILITIES (1) Shareholders’ funds (a) Share capital (b) Reserves and surplus (2) Non-current Liabilities – Long-term borrowings (3) Current liabilities – Trade payables Total | – 50,000 14,00,000 1,00,00 | |

II. ASSETS (1)Non-current assets (a)Fixed assets (2)Current Assets (a) Inventories (b) Trade Receivables (c) Cash and Cash Equivalents Total | _ _ 70,000 _ | |

**Additional Information :**

**1. Current Ratio is 2.5:1**

**2. Debt-equity Ratio is 2:1**

**3. Inventory Turnover Ratio is 8 Times**

**4. Cost of Revenue from operation is Rs. 4,00,000**

**Solution :**

**(i)** Inventory Turnover Ratio =

8 =

Inventory =

**(ii)**

Current Assets =

= Rs. 1,30,000

**(iii)** Debt Equity Ratio =

= Rs. 7,00,000

Equity = Share Capital + Reserves and Surplus

Rs. 7,00,000 = Share Capital + 50,000

Share Capital = Rs. 7,00,000-50,000 = Rs. 6,50,000

**Balance Sheet**

As at 31st March, 2015

Particulars | Note No. | Amount (Rs.) |

1. EQUITY AND LIABILITIES (1) Shareholders’ funds (a) Share capital (b) Reserves and surplus (2) Non-current Liabilities Long-term borrowings (3) Current liabilities Trade payables Total | 6,50,000 50,000 14,00,000 1,00,00 | |

22,00,000 | ||

II. ASSETS (1)Non-current assets (a)Fixed assets (2)Current Assets (a) Inventories (b) Trade Receivables (c) Cash and Cash Equivalents Total | 19,50,000 50,000 70,000 1,30,000 | |

22,00,000 |