Dear Seniors,
Please help me in preparing the balance sheet From the following information,
prepare the balance sheet
Current Ratio = 1.25
Quick Ratio = 1.25
Stock Turnover Ratio (Based on closing stock) = 9 times
Gross profit ratio 25%
Average Collection Period (in months) 1.5
Ratio of Reserve to capital 0.2
Turnover of Fixed Assets 1.2
Debt-Equity 0.6
Fixed assets to net worth 1.25
Sales of the year Rs. 24,00,000
sales 2400000
gp @ 25% 600000
cogs 1800000
so use stock turnover ratio to get closing stk 200000
use avg collection period to get debtors 300000
use fixed assets turnover ratio to get fixed assets 2000000
use fixed assets to net worth to get net worth 1600000
share capital + reserve= net worth
using this get share capital 1333333 & reserves 266667
use debt equity ratio to get debt 960000 (equity = net worth)
working capital=net worth + debt - fixed assets
so working cap will be 560000
also working cap = current assets - current liabilities
use this and current ratio to get
current liabilities 2240000 & current assets 2800000
quick assets = current assets - stock =2600000
so using quick ratio we get quick liabilities 2080000
quick liabilities = current liabilities - bank overdraft
so bank over draft =160000
using this u can prepare balance sheet
balance sheet (vertical form) total= 2560000
CAclubindia
