Page 348 - MA-12

Model Test Papers M.39

2. Dr. PATENTS ACCOUNTS Cr.
Particulars ` Particulars `
To Balance b/d 80,000 By Statement of Profit and Loss (Written off) 10,000
By Bank A/c (Sale) (Balancing Figure) 15,000
By Statement of Profit and Loss (Loss on Sale) 5,000
By Balance c/d 50,000
80,000 80,000

3. Decrease in the book value of Goodwill by ` 15,000 indicates amortisation of Goodwill. It is adjusted while
calculating Cash Flow from Operating Activities and does not effect Cash Flow from Investing Activities.
(b) CASH FLOW FROM FINANCING ACTIVITIES
Particulars `

Proceeds from issue of Equity Share Capital [ ` 2,00,000 + ` 20,000 (Premium] 2,20,000
Proceeds from Issue of Debentures (` 5,00,000 – ` 4,00,000) 1,00,000
Redemption of 10% Preference Shares [` 1,00,000 + ` 5,000 (Premium)] (1,05,000)
Payment of Preference Dividend (10% × ` 3,00,000) (30,000)
Payment of Equity Dividend (9% × ` 4,00,000) (36,000)
Interest paid on Debentures (10% × ` 5,00,000) (50,000)
Cash Flow from Financing Activities 99,000

Quick Assets ` 2,70,000
10. (a) (i) Liquid Ratio= = = 1.8 : 1.
Current Liabilities ` 1,50,000
Note: Quick Assets = Total Current Assets – Prepaid Insurance – Closing Inventory
= ` 3,00,000 – ` 5,000 – 25,000 = ` 2,70,000.

Shareholders’ Funds/Equity ` 4,50,000
(ii) Proprietary Ratio = = = 0.5 : 1.
Total Assets ` 9,00,000
Notes:
1. Shareholders’ Funds = Share Capital + Reserves and Surplus
= ` 4,00,000 + ` 50,000 = ` 4,50,000.
2. Total Assets = Total Current Assets + Non-current Assets
= ` 3,00,000 + ` 6,00,000 = ` 9,00,000.

Revenue from Operations ` 5,00,000
(iii) Working Capital Turnover Ratio= = = 3.33 Times.
Working Capital ` 1,50,000

Note: Working Capital = Current Assets – Current Liabilities
= ` 3,00,000 – ` 1,50,000 = ` 1,50,000.

(b) Trade Receivables Turnover Ratio = Credit Revenue from Operations
Average Trade Receivables

` 30,000
= = 1 Time.
` 30,000