Solution for Q 01 to 10 of Chapter 4 of Book 3 - Analysis of Financial Statements of T S Grewal Class 12 Accountancy 2026-27 are given below. The Chapter name is Ratio Analysis class 12. These Solutions are based on topics calculation of current ratio and quick ratio, calculating working capital, current assets and current liabilities.
Working notes are given with each solution. These help in understanding the steps and are also important for board exams as marks are given for steps.
These solutions are also useful for CA Foundation, CS Foundation and CMA Foundation students. The solutions will be helpful for students as well as teachers teaching class 12 accounts.
Question 1
| First we find out the missing values for Current Liabilities and Current Assets |
| |
| Liabilities |
|
|
Amount |
Assets |
|
|
Amount |
| Shareholders Funds |
|
1280000 |
Fixed Tangible Assets |
|
1000000 |
| Non Current Liabilities |
|
520000 |
Non Current Investments |
|
600000 |
| Current Liabilities |
|
200000 |
Current Assets |
|
400000 |
| (Balancing Figure) |
|
|
(Balancing Figure) |
|
|
| Total |
|
|
2000000 |
Total |
|
|
2000000 |
| Note : |
Since total liabilities = Total Assets so Total Liabilities also equals Rs 20 Lakhs |
| |
|
|
| |
|
OR |
| |
|
|
| Step 1 |
Total Assets = Total Liabilities |
| |
As per question total assets = Rs 20L. So total liabilities also = Rs 20L |
| |
|
|
| Step 2 |
Shareholder Funds + Non Current Liabilities + Current Liabilities = Total Liabilities |
| |
1280000+520000+ CL = 2000000 |
| |
CL = 2000000-1280000-520000 |
| |
CL = 200000 |
| |
|
|
| Step 3 |
Non Current Assets + Current Assets = Total Assets |
| |
1000000 + CA = 2000000 |
| |
CA = 2000000-1000000 |
| |
CA = 1000000 |
| |
|
|
| |
Note : Fixed Tangible assets is part of Non Current Assets |
| |
|
|
| Step 4 |
Find Current Ratio |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Current |
Current Assets |
/ |
Current Liabilities |
|
|
|
| Ratio |
400000 |
/ |
200000 |
|
|
|
| |
2:1 |
|
|
|
|
|
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▶ Video Solution: Coming Soon
Question 2
| Inventories |
|
|
100000 |
|
|
|
| Trade Receivables |
|
120000 |
|
|
|
| Advance Tax |
|
24000 |
|
|
|
| Cash and Cash Equivalents |
|
56000 |
|
|
|
| Total Current Assets |
|
300000 |
|
|
|
| |
|
|
|
|
|
|
| Trade Payables |
|
60000 |
|
|
|
| Bank Overdraft |
|
40000 |
|
|
|
| Total Current Liabilities |
|
|
100000 |
|
|
|
| Current Ratio |
= |
Current Assets |
/ |
Current Liabilities |
| |
|
300000 |
|
100000 |
| |
|
3:1 |
|
|
▶ Video Solution: Coming Soon
Question 3
| Step 1 |
|
|
|
|
| Working Capital |
= |
Current Assets |
- |
Current Liabilities |
| So |
|
|
|
|
| Current Liabilities |
= |
Current Assets |
- |
Working Capital |
| |
|
750000 |
- |
250000 |
| Current Liabilities |
= |
500000 |
|
|
| |
|
|
|
|
| Step 2 |
|
|
|
|
| Current Ratio |
= |
Current Assets |
/ |
Current Liabilities |
| |
|
750000 |
|
500000 |
| |
|
1.5:1 |
|
|
▶ Video Solution: Coming Soon
Question 4
| Step 1 (Understand the impact of transaction) |
| |
| Goods Purchased for credit |
| Journal Entry |
| |
| Inventories A/c Dr.. |
|
|
30000 |
|
|
|
|
| To Sundry Creditors A/c |
|
|
|
30000 |
|
|
|
| Step 2 |
|
|
| Current Assets |
450000 |
(As per question) |
| Add - Inventory |
30000 |
(Inventory is part of Current Assets) |
| |
|
(Due to purchases made the currrent assets increased) |
| Revised Current Assets |
480000 |
|
| |
|
|
| Step 3 |
|
|
| Current Liabilities |
200000 |
|
| Add - Sundry Creditors |
30000 |
(Due to purchases on credit the current liabilities have increased) |
| |
|
|
| Revised Current Liabilities |
230000 |
|
| |
|
|
| Current Ratio |
|
= |
Current Assets |
|
/ |
Current Liabilities |
|
| Current Ratio |
= |
480000 |
/ |
230000 |
|
| |
|
= |
2.09:1 |
|
|
|
|
▶ Video Solution: Coming Soon
Question 5
| Step 1 (Understand the impact of transaction) |
| |
| Payment made to creditor |
| Journal Entry |
| |
| Sundry Creditors A/c Dr.. |
|
|
30000 |
|
(Creditors reduced) |
|
|
| To Bank A/c |
|
|
|
30000 |
(Bank A/c reduced) |
|
|
| Step 2 |
Find Current Assets (Existing) |
|
|
|
|
|
|
| Current Ratio |
= |
Current Assets |
/ |
Current Liabilities |
|
| 2 |
= |
CA |
/ |
175000 |
|
| So |
|
| Current Assets |
= |
175000 |
X |
2 |
|
| |
|
= |
350000 |
|
|
|
|
| Step 3 |
|
|
|
| |
|
|
|
| Current Assets |
350000 |
|
|
| Less - Bank |
30000 |
|
|
| |
|
|
|
| Revised Current Assets |
320000 |
|
|
| (After making payment to creditors) |
| |
|
|
|
| Step 4 |
|
|
|
| Current Liabilities |
175000 |
|
|
| Less - Sundry Creditors |
30000 |
|
|
| |
|
|
|
| Revised Current Liabilities |
145000 |
|
|
| (After making payment to creditors) |
| |
|
|
|
| Current Ratio |
Current Assets |
/ |
Current Liabilities |
| |
320000 |
|
145000 |
| |
2.21:1 |
|
|
▶ Video Solution: Coming Soon
Question 6
| Step 1 |
|
|
|
|
|
|
|
| Working Capital |
= |
Current Assets |
- |
Current Liabilities |
|
| |
|
|
|
|
|
|
|
| So |
|
| |
|
|
|
|
|
|
|
| Current Assets |
= |
Working Capital |
+ |
Current Liabilities |
|
| |
|
|
150000 + CL |
|
|
|
|
| In the above we have expressed Current Assets in terms of Current Liabilities |
| |
| Now |
|
|
|
|
|
|
|
| Step 2 |
|
| Current Ratio |
= |
Current Assets |
/ |
Current Liabilities |
|
| In this formula, replace Current Assets by the formula (WC + CL) |
|
| |
|
|
|
|
|
|
|
| Current Ratio |
|
= |
WC + CL |
|
/ |
Current Liabilities |
|
| Now replace the known values in the formula |
| |
| Step 3 |
|
|
|
|
|
|
|
| 2.5 |
= |
150000+CL |
/ |
CL |
|
| |
|
|
|
|
|
|
|
| 2.5CL |
= |
150000+CL |
|
|
| 2.5CL - CL |
= |
150000 |
|
|
| 1.5CL |
= |
150000 |
|
|
| CL |
= |
150000 / 1.5 |
|
|
| |
|
= |
100000 |
|
|
|
|
| So we get the value of Current Liabilities |
| |
| Now |
|
|
|
|
|
|
|
| Current Assets |
= |
Working Capital |
+ |
Current Liabilities |
|
| |
|
|
150000 |
+ |
100000 |
|
| |
|
= |
250000 |
|
| |
|
|
|
|
|
|
|
| |
|
|
OR |
|
| CA/CL = 2.5 |
|
| CA = 2.5CL |
|
| |
|
|
|
|
|
|
|
| WC |
= |
CA |
- |
CL |
|
| 150000 |
= |
2.5CL |
- |
CL |
|
| 150000 |
= |
1.5CL |
|
| CL |
= |
150000 |
/ |
1.5 |
|
| |
= |
100000 |
|
|
|
|
|
| Then |
|
|
|
|
|
|
|
| CA = 2.5CL |
|
|
|
|
|
| CA = 2.5*100000 = Rs 250000 |
|
|
|
|
|
|
|
▶ Video Solution: Coming Soon
Question 7
| Step 1 |
|
|
|
|
| Total Debt |
= |
Current Liabilities |
+ |
Non Current Liabilities |
| 2700000 |
|
CL |
+ |
2400000 |
| |
|
|
|
|
| CL |
= |
Total Debt |
- |
Non Current Liabilities |
| |
|
2700000 |
|
2400000 |
| CL |
= |
300000 |
|
|
| |
|
|
|
|
| Step 2 |
|
|
|
|
| Working Capital |
= |
Current Assets |
- |
Current Liabilities |
| So |
|
|
|
|
| Current Assets |
= |
Working Capital |
+ |
Current Liabilities |
| |
|
600000 |
+ |
300000 |
| |
|
|
|
|
| Current Assets |
= |
900000 |
|
|
| |
|
|
|
|
| Step 3 |
|
|
|
|
| Current Ratio |
= |
Current Assets |
/ |
Current Liabilities |
| |
|
900000 |
|
300000 |
| |
|
|
|
|
| |
= |
3:1 |
|
|
▶ Video Solution: Coming Soon
Question 8
| Step 1 |
|
|
|
|
| Current Liabiities |
= |
Trade Payables |
+ |
Other Current Liabilities |
| |
|
|
|
|
| |
|
180000 |
+ |
420000 |
| |
|
|
|
|
| Current Liabiities |
= |
600000 |
|
|
| |
|
|
|
|
| Step 2 |
|
|
|
|
| Working Capital |
= |
Current Assets |
- |
Current Liabilities |
| So |
|
|
|
|
| Current Assets |
= |
Working Capital |
+ |
Current Liabilities |
| |
|
1800000 |
+ |
600000 |
| |
|
|
|
|
| Current Assets |
= |
2400000 |
|
|
| |
|
|
|
|
| Step 3 |
|
|
|
|
| Current Ratio |
= |
Current Assets |
/ |
Current Liabilities |
| |
|
2400000 |
|
600000 |
| |
|
4:1 |
|
|
▶ Video Solution: Coming Soon
Question 9
| Step 1 |
|
|
|
|
| Total Debts |
= |
Current Liabilities |
+ |
Long Term Debts (Non Current Liabilities) |
| So |
|
|
|
|
| Current Liabilities |
= |
Total Debts |
- |
Long Term Debts |
| |
|
1950000 |
- |
1500000 |
| |
|
|
|
|
| Current Liabiities |
= |
450000 |
|
|
| |
|
|
|
|
| Step 2 |
|
|
|
|
| Working Capital |
= |
Current Assets |
- |
Current Liabilities |
| So |
|
|
|
|
| Current Assets |
= |
Working Capital |
+ |
Current Liabilities |
| |
|
900000 |
+ |
450000 |
| Current Assets |
= |
1350000 |
|
|
| |
|
|
|
|
| Step 3 |
|
|
|
|
| Current Ratio |
= |
Current Assets |
/ |
Current Liabilities |
| |
|
1350000 |
|
450000 |
| |
|
3:1 |
|
|
▶ Video Solution: Coming Soon
Question 10
| Step 1 |
|
|
|
|
|
|
|
| Working Capital |
= |
Current Assets |
- |
Current Liabilities |
|
| So |
|
| Current Assets |
= |
Working Capital |
+ |
Current Liabilities |
|
| |
|
|
900000 |
+ |
300000 |
|
| |
|
|
|
|
|
|
|
| Current Assets |
|
= |
1200000 |
|
|
|
|
| Note : Trade Payables already included in Current Liabilities so not considered separately |
| |
| Step 2 |
|
|
|
|
|
|
|
| Current Ratio |
= |
Current Assets |
/ |
Current Liabilities |
|
| |
|
= |
1200000 |
/ |
300000 |
|
| |
|
= |
4:1 |
|
|
|
|
▶ Video Solution: Coming Soon
