ABC Company Ltd provides you following information and balance sheet on 31 December:Balance SheetLiabilitiesAmountAssetsAmountEquity shares capital @ Rs 1006% Preference shares capital8% Debentures200,000 Fixed assets475,00050,000 Long term investment50,000 Other quick assets180,000 Closing stock180,000 Preliminary expenses131,750 Account receivable55,75050,000135,000Current liabilities20,000General reserve10,000P&L account last year157,500P&L account current year847,500847,500Other information:Fixed assets turnover ratio was 3 times for the year.Net profit margin before interest and tax was 10% opening stock sales.Company is within 50% tax brackets,Working days during the year was 360 days.Required: (a) Current ratio; (b) Quick ratio; (c) Debt equity ratio; (d) Return on shareholders'equity.

ABC Company Ltd provides you following information and balance sheet on 31 December: Balance Sheet Liabilities Equity shares capital @ Rs 100 6% Preference shares capital Amount Assets Amount 200,000 Fixed assets 475,000 50,000 Long term investment 50,000 8% Debentures 135,000 50,000 Other quick assets 180,000 Closing stock Current liabilities 20,000 General reserve 180,000 Preliminary expenses 10,000 P&L account last year 131,750 Account receivable 157,500 P&L account current year 55,750 847,500 847,500 Other information: Fixed assets turnover ratio was 3 times for the year. Net profit margin before interest and tax was 10% opening stock sales. Company is within 50% tax brackets, Working days during the year was 360 days. Required: (a) Current ratio; (b) Quick ratio; (c) Debt equity ratio; (d) Return on shareholders' equity.

ABC Company Ltd provides you following information and balance sheet on 31 December: Balance Sheet Liabilities Equity shares capital @ Rs 100 6% Preference shares capital Amount Assets Amount 200,000 Fixed assets 475,000 50,000 Long term investment 50,000 8% Debentures 135,000 50,000 Other quick assets 180,000 Closing stock Current liabilities 20,000 General reserve 180,000 Preliminary expenses 10,000 P&L account last year 131,750 Account receivable 157,500 P&L account current year 55,750 847,500 847,500 Other information: Fixed assets turnover ratio was 3 times for the year. Net profit margin before interest and tax was 10% opening stock sales. Company is within 50% tax brackets, Working days during the year was 360 days. Required: (a) Current ratio; (b) Quick ratio; (c) Debt equity ratio; (d) Return on shareholders' equity.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 103.2C

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