Accounting for Share Capital — Accountancy STD 12 Commerce — Question

What is meant by ‘analysis of financial statements’? State any two limitations of such analysis.

While computing cash from operating activities, indicate whether the following items will be added or subtracted from the net profit, if not to be considered write NC.

	Items	Result
(a)	Increase in the value of creditors.
(b)	Increase in the value of patents.
(c)	Decrease in prepaid expenses.
(d)	Decrease in income received in advance.
(e)	Decrease in value of inventory.
(f)	Increase in share capital.
(g)	Increase in the value of trade receivables.
(h)	Increase in the amount of outstanding expenses.
(i)	Conversion of debentures into shares.
(j)	Decrease in the value of trade payables.
(k)	Increase in the value of trade receivables.
(l)	Decrease in the amount of accrued income.

Gross Profit at 25% on cost; Gross Profit ₹ 5,00,000; Equity Share Capital ₹ 10,00,000; Reserves and Surplus ₹ 2,00,000; Long-term Loan ₹ 13,00,000; Fixed Assets (Net) ₹ 10,00,000. Calculate Working Capital-Turnover-Ratio:
[Hint: Working Capital = ₹ 5,00,000; Total Sales = ₹ 25,00,000.]

The motto of Yash Ltd., an advertising company is 'Service With Dignity'. Its management and work force is hard-working, honest and motivated. The net profit of the company doubled during the year ended 31.3.2014. Encouraged by its perf onnance company decided to give one month extra salary to all its employees. Following is the Comparative Statement of Profit and Loss of the company for the years ended 31st March 2013 and 2014.

1. Calculate Net Profit Ratio for the years ending 31st March, 2013 and 2014.
2. Identify any two values which Y ash Ltd. is trying to propagate.

From the following Balance Sheets of Vikas Ltd. as on 31.3.2009 and 31.3.2010, prepare a Cash Flow Statement:

Additional Information:

1. Depreciation charged on fixed assets for the year 2009 - 2010 was ₹ 20,000.
2. Income Tax ₹ 5,000 has been paid in advance during the year.

From the following information, determine Opening and Closing Inventories:
Inventory Turnover Ratio 5 Times, Total Sales ₹ 2,00,000, Gross Profit Ratio 25%. Closing Inventory is more by ₹ 4,000 than the Opening Inventory.

The ratio of Current Assets (₹ 5,00,000) to Current Liabilities is 2.5 : 1. The accountant of this firm is interested in maintaining a Current Ratio of 2 : 1 by acquiring some Current Assets on Credit. You are required to suggest him the amount of Current Assets which must be acquired for this purpose.

A limited company forfeited 400 shares of Mr. X, who had applied for 600 shares on account of non-payment of allotment money ₹ 3 + ₹ 2.50 (premium) and first call ₹ 2. Only ₹ 4 per share was received with application. Out of these, 200 shares were re-issued to Mr. Y at ₹ 8 per share, ₹ 9 paid-up.
Give journal entries relating to forfeiture and re-issue.

Strong Ltd. has 10,000; 10% Debentures of ₹ 1,000 each outstanding as on 31st March, 2017. These debentures are due for redemption on 31st March, 2018 at a premium of 10%. Ascertain the missing values in the following Journal of Strong Ltd.