Q. 1 – Convert the Above Balance Sheet into Vertical Format & Calculate -

1. Current Ratio.2. Quick Ratio / Liquid Ratio.3. Super Quick Ratio.4. Capital.5. Debit Equity Ratio.6. Stock Working Capital Ratio.7. Proprietary Ratio.

M.S.T.

Liabilities Amount Assets Amount

12% Pref. Share Capital (1,00,000 X Rs. 10) 10,00,000 Goodwill 2,00,000

Equity Share Capital (1,00,000 X Rs. 10) 10,00,000 Patent & Trademark 1,00,000

General Reserve 4,00,000 Copyright 1,00,000

Security Premium 6,00,000 Investment Nil

Capital Reserve 3,00,000 Land & Building 20,00,000

Capital Redemption Reserve 1,00,000 Pant & Machinery 5,00,000

12% Debenture 10,00,000 Motor Vehicles 5,00,000

14% Loan From IDBI 5,00,000 Sundry Debtors 1,00,000

15% Loan From ICICI 4,00,000 Bills Receivable 90,000

Sundry Creditor 60,000 Closing Stock 1,00,000

Bills Payable 40,000 Cash In Hand 50,000

Bank Overdraft 1,00,000 Cash At Bank 50,000

Prepaid Expenses 10,000

Total Rupees 55,00,000/- 55,00,000/-

Ans. – Vertical Balance Sheet as on 31st Dec. 2009 -

  Particulars Amount Amount Amount  Source Of Fund Or Fund Employed By      

A Capital      1 Share Holders/ Owners/Proprietors Fund      a Authorized Capital    Nil  b Issued & Paid-Up Capital      i 12% Preference Share Capital (1,00,000 Of Rs. 10 Each) 10,00,000    

ii Equity Share Capital (1,00,000 Of Rs. 10 Each) 10,00,000          20,00,000  2 Add- Reserve & Surpluses      i General Reserved 4,00,000    

ii Security Premium 6,00,000    iii Capital Reserve 3,00,000    iv Capital Redemption Reserve 1,00,000    

      14,00,000          34,00,000

B Loan Or Borrowed Fund      1 Secured Loan      i 12% Debentures 10,00,000    

ii 14% Loan From IDBI 5,00,000    iii 15% Loan From ICICI 4,00,000    

      19,00,000  2 Unsecured Loan Nil Nil          19,00,000  Total Sources Of Fund     53,00,000

           Application Of Fund Or Fund Employed As               a Fixed Assets      1 Intangible      i Goodwill 2,00,000    

ii Patent & Trademark 1,00,000    iii Copy Right 1,00,000    iv Leasehold Rights Nil    

      4,00,000  2 Tangible      i Land & Building 20,00,000    

ii Plant & Machinery 22,00,000    iii Motor Vehicles 5,00,000    

      47,00,000          51,00,000

M.S.T.

 

b Investment     Nil         c Net Current Asset Or Working Capital      1 Current Assets      i Sundry Debtors 1,00,000    

ii Bill Receivable 90,000    iii Closing Stock 1,00,000    iv Cash In Hand 50,000    v Cash In Bank 50,000    

vi Prepaid Expenses 10,000          4,00,000          55,00,0002 Less - Current Liabilities      i Sundry Creditor 60,000  

ii Bank Payable 40,000  iii Bank Overdraft 1,00,000  

      2,00,000   Total Application Of Fund     53,00,000

M.S.T.

Q. 2 - Rearrange the Above Balance Sheet in the Form Suitable For Analysis &

Calculate the Following –

1. Total Found Employed.2. Proprietors Found.3. Long-Term Liabilities.4. Current Liabilities.5. Fixed Assets.6. Current Assets.7. Quick Assets.8. Working Capital.9. Fictitious Assets.

Liabilities Amount Assets Amount2Paid Up Share Capital 4,75,000 Factory Premises 2,25,000

Capital Redemption Reserve 3,25,000 Pant & Machinery 1,74,586

Profit & Loss A/C 12,929 Motor Vehicles 35,520

Sundry Creditor 25,515 Stock 52,320

Outstanding Wages 6,415 Debtors 45,790

Provision For Taxation 8,950 Cash 16,595

    Taxes Paid In Advance 3,998

    Preliminary Expenses 7,500

Total Rupees 5,61,309   5,61,309

M.S.T.

Ans. – Vertical Balance Sheet as on 31st September. 2005 –

Particular Amount Amount AmountApplication Of Funds

1 Fixed Assetsi Factory Premises 2,25,000

ii Plant & Machinery 1,74,586iii Motor Car 35,520

4,35,1062 Investment Nil3 Net Current AssetsA Current Assetsi Cash 16,595

ii Stock 52,320iii Debtors 45,790iv Taxes Paid In Advances 3,998

1,18,703B Less- Current Liabilities & Provisioni Sundry Creditor 25,515

ii Outstanding Wages 6,415iii Provision For Taxation 8,950

40,88077,823

Net Assets Employed 5,12,929

Sources Of Fundi Share Capital 4,75,000

ii Reserves 32,500iii Profit & Loss A/C 12,929

5,20,429iv Less- Preliminary Expenses 7,500

Proprietors Fund 5,12,929

Thus,

1. Total Fund Employed - 5, 12,929.2. Proprietors Fund - 5, 12,929.3. Long-Term Liabilities - Nil.4. Current Liabilities - 40,880.5. Fixed Assets - 4, 35,106.6. Current Assets - 1, 18,703.7. Quick Assets = Current Assets – Stock – Advance Tax

= 1, 18,703 – 52,320 – 3998M.S.T.

= 62,385.8. Working Capital - 77,823.9. Fictions Assets (Preliminary Expenses) - 7,500.

Q.3 – Rearrange the Above Balance Sheet in A Form Suitable For Analysis & Calculate the Following,-

1. Current Assets.2. Quick Assets.3. Intangible Assets.4. Fictitious Assets.5. Fixed Assets.6. Fixed Liabilities.7. Proprietor Fund.8. Working Capital.9. Total Funds Employed.10.Secured Loan.11.Owned Fund.

Liabilities Amount Assets AmountShare Capital 7,50,000 Goodwill 1,25,000Capital Reserve 1,500 Land 1,29,000General Reserve 1,20,410 Premises  Leasehold Redemption Fund 42,500 Plant 2,34,395Profit & Loss A/C 13,777 Furniture 8,5755% Debentures 1,57,500 3% G. P. Notes 71,400Sundry Creditor 73,900 Stock 1,96,770Proposed Creditor 75,000 Debtors 2,03,942Provision For Taxation 25,000 Cash At Bank 1,20,280    Advance Tax 23,675    Preliminary Expenses 1,550Total Rupees 12,64,587   12,64,587

M.S.T.

Ans. – Vertical Balance Sheet as on 31st Dec. 2004 –

Particulars Amount Amount AmountI Source Of Funds Or Fund Employed ByA Share Holders/ Owners/Proprietors Fundi Share Capital 7,50,000ii Capital Reserve 1,500iii General Reserved 1,20,410iv Leasehold Redemption Fund 42,500v Profit & Loss A/C 18,777

9,33,187B Less- Preliminary Expenses 1500

9,31,637C Loan or borrowed Fundi 5% Debentures 1,57,500

Total Resources 10,89,137

II Application Of FundA Fixed Assetsi Goodwill 1,25,000ii Land 1,29,000iii Premises 1,50,000iv Plant 2,34,395v Furniture 8,575

6,46,970B Investment (3% G.P. Notes) 71,400

C Net Current Assetsi Stock 1,96,770ii Debtors 2,03,942iii Cash At Bank 1,20,280iv Advance Tax 23,675

5,44,66712,63,037

D Less- Current Liabilitiesi Sundry Creditors 73,900ii Proposed Dividend 75,000iii Provision For Taxation 25,000

1,73,9001,73,900

Total Funds Utilized 10,89,137

M.S.T.

Thus,1. Current Assets - 5,44,6672. Quick Assets (Current Assets Less Stock & Advance Tax) - 3,24,2223. Intangible Assets (Goodwill) - 1,25,0004. Fictitious Assets (Preliminary Expenses) - 1,5505. Fixed Assets - 6,46,9706. Fixed Liabilities - 1,57,5007. Proprietor Fund - 9,31,6378. Working Capital (Current Assets Less Current Liabilities) - 3,70,7679. Total Funds Employed - 10,89,13710.Secured Loan - 1,57,50011.Owned Fund - 1,57,500

M.S.T.

Q. 4 – From the following particulars of a ltd. Prepare balance sheet in horizontal format

As well as vertical format as on 31-12-2008.

Particular Debit Credit1 Share Capital2 11% Preference Share Of Rs. 10 Each 10,00,0003 Equity Share Of Rs. 10 Each 20,00,0004 Securities Premium Etc 6,00,0005 Development Reserve 1,00,0006 14% Debentures 4,00,0007 Profit & Loss A/C 3,00,0008 Goodwill A/C 3,00,0009 Patent & Trademark 1,00,00010 Plant & Machinery 1,00,00011 Land & Building 10,00,00012 Motor Vehicle 22,00,00013 Stock 11,00,00014 Debtor 60,00,00015 Bill Receivable 20,00016 Bank Of India 20,00017 Bank Of Baroda 40,00018 Cash In Hand 60,00019 Bill Payable 1,00,00020 Bank Overdraft 60,00021 Creditor 20,000

20,000Total Rupees 48,00,000 48,00,000

M.S.T.

Ans.- Vertical Sheet As On 31st December 2008 -

Particulars Amount Amount AmountSource Of Fund Or Fund Employed By

A Capital

 1 Share Holders/ Owners/Proprietors Fund

i Authorized Capital

ii Issued & Paid-Up Capital

a 11% Preferred Share Capital Of Rs. 10 Each 10,00,000

b Equity Share Capital Of Rs. 10 Each 20,00,000

30,00,000

2 Add- Reserve & Surpluses

i Security Premium 6,00,000

ii Development Reserve A/C 1,00,000

iii General Reserved A/C 3,00,000

iv Profit & Loss A/C 3,00,000

13,00,000

43,00,000

B Loan Or Borrowed Fund

1 Secured Loan

a 14% Debentures 4,00,000

2 Unsecured Loan Nil Nil

4,00,000

Total Sources Of Fund 47,00,000

Application Of Fund Or Fund Employed As

A Fixed Assets

1 Intangible

M.S.T.

i Goodwill 1,00,000

ii Patent & Trademark 1,00,000

2,00,000

2 Tangible

i Plant & Machinery 10,00,000

ii Land & Building 22,00,000

iii Motor Vehicles 11,00,000

43,00,000

45,00,000

B Investment Nil

C Current assets ,loans &advances

i Stock 60,000

ii Debtor 20,000

iii Bill Receivable 20,000

iv Bank Of India 40,000

v Bank Of Baroda 60,000

vi Cash In Hand 1,00,000

3,00,000

48,00,000

D less-Current Liabilities & Provision

i Creditor 20,000

ii Bill Payable 60,000

iii Bank Overdraft 20,000

1,00,000

47,00,000

M.S.T.

Q. 5 – From the following particulars of a ltd. Prepare balance sheet in horizontal format

As well as vertical format as on 31-03-2009.

Particular Debit Credit1 Goodwill 2,00,0002 Land &Building 1,00,0003 Plant & Machinery 6,00,0004 Motor Vehicle 4,00,0005 Patent & Trademark 2,00,0006 Leasehold Right 2,00,0007 Profit & Loss A/C 2,00,0008 Preliminary Expenses 1,00,0009 Equity Share Capital 20,00,000

10 9% Preference Expenses 6,00,00011 Securities Premium 4,00,00012 Development Reserve 6,00,00013 Stock 3,00,00014 Debtor 4,00,00015 Bill Receivable 2,00,00016 Cash In Hand 2,00,00017 Bank Of India 1,00,00018 Bank Of Baroda 1,00,00019 Bill Payable 2,00,00020 Bank Overdraft 3,00,000

M.S.T.

Total Rupees 42,00,000 42,00,000

Ans. – Vertical Balance Sheet as on 31st March 2009 –

Particulars Amount Amount AmountSource Of Fund Or Fund Employed By

I Capital1 Share Holders/ Owners/Proprietors FundA Authorized Capital NilB Issued & Paid-Up Capital 20,00,000i 9% Preferred Share Capital 6,00,000

26,00,000B Add- Reserve & Surplusesi Security Premium 4,00,000ii Development Reserve 6,00,000

10,00,00036,00,000

i Less- Profit & Loss A/C 2,00,000ii Preliminary Expenses 1,00,000

3,00,00033,00,000

2 loan or borrowed fund A Secured Loan Nil

B Unsecured Loan Nil

Sources Of Fund 33,00,000

Application Of Fund Or Fund Employed AsM.S.T.

A Fixed Assets1 IntangibleI Goodwill 2,00,000ii Patent & Trademark 2,00,000iii Leasehold Rights 2,00,000

6,00,0002 TangibleI Land & Building 11,00,000ii Plant & Machinery 6,00,000iii Motor Vehicles 4,00,000

1,00,00021,00,000

27,00,000B Investment NilC Net Current Assets or Working Capital1 Current Assetsi Stock 3,00,000ii Debtor 4,00,000iii Bill Receivable 2,00,000iv Cash In Hand 2,00,000V Bank Of India 1,00,000

12,00,00039,00,000

2 Less- Current Liabilities & ProvisionI Bill Payable 2,00,000ii Creditor 3,00,000iii Bank of Baroda 1,00,000

6,00,000Total Application Of Fund 33,00,000

M.S.T.

Q. 6 – from the following horizontal balance sheet convert into vertical balance sheet as on 31st December 2007.

Liabilities Amount Assets Amount

Share Capital   Goodwill 2,00,000

11% Pref. Share Capital 20,00,000 Land & Building 20,00,000

Equity Share Capital 30,00,000 Plant & Machinery 10,00,000

General Reserve 4,00,000 Motor Vehicles 6,00,000

Capital Reserve 3,00,000 Leasehold Right 3,00,000

Security Premium 4,00,000 Stock 2,00,000

Sundry Creditor 1,00,000 Cash In Hand 3,00,000

Bills Payable 1,00,000 Bill Received 2,00,000

Bank Overdraft 1,00,000 Sundry Debtors 3,00,000

    SBI A/C 4,00,000

    Bank Of Baroda 6,00,000

Preliminary Expenses 3,00,000

Total Rupees 64,00,000   64,00,000

M.S.T.

Ans. – Vertical Balance Sheet as on 31st December 2007 –

Particulars Amount Amount AmountSource Of Fund Or Fund Employed By

I Capital1 Share Holders/ Owners/Proprietors FundA Authorized CapitalB Issued & Paid-Up Capitali 11% Preferred Share Capital 20,00,000ii Equity Share Capital 30,00,000

50,00,0002 Add-Reserve & Surplusesii General Reserved 4,00,000ii Capital Reserved 3,00,000iii Security Premium 4,00,000

11,00,000

i Less-Preliminary Expenses 3,00,000 3,00,00058,00,000

II Loan or Borrowed Fundi Secured Loan Nil

ii Unsecured Loan NilM.S.T.

NilTotal Sources Of Fund 58,00,000

Application Of Fund Or Fund Employed AsA Fixed Assets1 Intangiblei Goodwill 2,00,000ii Leasehold Rights 3,00,000

5,00,0002 Tangiblei Land & Building 20,00,000ii Motor Vehicles 6,00,000iii Plant & Machinery 10,00,000

36,00,00041,00,000

B Investment Nil

C Net Current Assets or Working Capital1 Current Assetsi Stock 2,00,000ii Cash In Hand 3,00,000iii Bill Receivable 2,00,000iv Sundry Debtor 3,00,000v SBI A/C 4,00,000vi Bank Of Baroda A/C 6,00,000

20,00,00061,00,000

2 Less- Current Liabilities & Provisioni Sundry Creditor 1,00,000ii Bill Payable 1,00,000iii Bank Overdrafts 1,00,000

3,00,000Total Application Of Fund 58,00,000

M.S.T.