Solution for Q 21 to 30 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 quick ratio, acid test ratio, finding quick assets from the given information in question, fincing the value of inventories when current rato and quick ratio are given, current ratio and quick ratio, calculating working capital, current assets and current liabilities, analysing if any transactions results into increase or decrease in current ratios, finding the value of current assets from given information, finding the value of current liabilities from given information.
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 21
| Step 1 |
|
|
|
|
| Current Ratio |
= |
Current Assets |
/ |
Current Liabilities |
| 3 |
= |
CA |
|
CL |
| |
|
CA |
/ |
1500000 |
| |
|
|
|
|
| Current Assets |
= |
Current Ratio |
X |
Current Liabilities |
| |
|
3 |
X |
1500000 |
| |
|
|
|
|
| |
= |
4500000 |
|
|
| |
|
|
|
|
| Step 2 |
|
|
|
|
| Liquid Ratio |
= |
Liquid Assets |
/ |
Current Liabilities |
| 1 |
= |
LA |
|
CL |
| |
|
LA |
/ |
1500000 |
| |
|
|
|
|
| Liquid Assets |
= |
Liquid Ratio |
X |
Current Liabilities |
| |
|
1 |
X |
1500000 |
| |
|
|
|
|
| |
= |
1500000 |
|
|
| |
|
|
|
|
| Step 3 |
|
|
|
|
| Inventory |
= |
Current Assets |
- |
Quick Assets |
| |
|
4500000 |
- |
1500000 |
| |
= |
3000000 |
|
|
▶ Video Solution: Coming Soon
Question 22
| Step 1 |
|
|
|
|
| Current Ratio |
= |
Current Assets |
/ |
Current Liabilities |
| 4 |
= |
CA |
|
CL |
| |
|
|
|
|
| Current Assets |
= |
4 CL |
|
|
| |
|
|
|
|
| Step 2 |
|
|
|
|
| Quick Ratio |
= |
Quick Assets |
/ |
Current Liabilities |
| 2.5 |
= |
QA |
|
CL |
| |
|
|
|
|
| Quick Assets |
= |
2.5 CL |
|
|
| |
|
|
|
|
| Step 3 |
|
|
|
|
| Inventory |
= |
Current Assets |
- |
Quick Assets |
| 600000 |
= |
4 CL |
- |
2.5 CL |
| 600000 |
= |
1.5 CL |
|
|
| |
|
|
|
|
| CL |
= |
600000 |
/ |
1.5 |
| |
= |
400000 |
|
|
▶ Video Solution: Coming Soon
Question 23
| Step 1 |
|
|
|
|
|
| Current Ratio |
= |
Current Assets |
/ |
Current Liabilities |
| 4.5 |
= |
CA |
|
|
CL |
| |
|
|
|
|
|
| Current Assets |
= |
4.5 CL |
|
|
|
| |
|
|
|
|
|
| Step 2 |
|
|
|
|
|
| Quick Ratio |
= |
Quick Assets |
/ |
Current Liabilities |
| 3 |
= |
QA |
|
|
CL |
| |
|
|
|
|
|
| Quick Assets |
= |
3CL |
|
|
|
| |
|
|
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|
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| Step 3 |
|
|
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|
|
| Inventory |
= |
Current Assets |
- |
Quick Assets |
| 36000 |
= |
4.5 CL |
|
- |
3CL |
| 36000 |
= |
1.5 CL |
|
|
|
| |
|
|
|
|
|
| CL |
= |
36000 |
|
/ |
1.5 |
| |
= |
24000 |
|
|
|
| |
|
|
|
|
|
| Now, |
|
|
|
|
|
| |
|
|
|
|
|
| Current Assets |
= |
4.5 CL |
|
|
|
| |
= |
4.5 |
X |
24000 |
|
| |
= |
108000 |
|
|
|
▶ Video Solution: Coming Soon
Question 24
| Step 1 |
|
|
|
|
|
| Current Ratio |
= |
Current Assets |
/ |
Current Liabilities |
| 4 |
= |
CA |
|
|
CL |
| |
|
|
|
|
|
| Current Assets |
= |
4 CL |
|
|
|
| |
|
|
|
|
|
| Step 2 |
|
|
|
|
|
| Quick Ratio |
= |
Quick Assets |
/ |
Current Liabilities |
| 2.5 |
= |
QA |
|
|
CL |
| |
|
|
|
|
|
| Quick Assets |
= |
2.5 CL |
|
|
|
| |
|
|
|
|
|
| Step 3 |
|
|
|
|
|
| Inventory |
= |
Current Assets |
- |
Quick Assets |
| 600000 |
= |
4 CL |
|
- |
2.5 CL |
| 600000 |
= |
1.5 CL |
|
|
|
| |
|
|
|
|
|
| CL |
= |
600000 |
|
/ |
1.5 |
| |
= |
400000 |
|
|
|
| |
|
|
|
|
|
| Now, |
|
|
|
|
|
| Current Assets |
= |
4 CL |
|
|
|
| |
= |
4 |
X |
400000 |
|
| |
= |
1600000 |
|
|
|
| |
|
|
|
|
|
| Liquid Assets |
= |
2.5 CL |
|
|
|
| |
|
2.5 |
X |
400000 |
|
| |
= |
1000000 |
|
|
|
▶ Video Solution: Coming Soon
Question 25
| Step 1 |
|
|
|
|
| Current Ratio |
= |
Current Assets |
/ |
Current Liabilities |
| 3 |
= |
CA |
|
CL |
| |
|
CA |
/ |
1500000 |
| |
|
|
|
|
| Current Assets |
= |
Current Ratio |
X |
Current Liabilities |
| |
|
3 |
X |
1500000 |
| |
|
|
|
|
| |
= |
4500000 |
|
|
| |
|
|
|
|
| Step 2 |
|
|
|
|
| Liquid Ratio |
= |
Liquid Assets |
/ |
Current Liabilities |
| 1 |
= |
LA |
|
CL |
| |
|
LA |
/ |
1500000 |
| |
|
|
|
|
| Liquid Assets |
= |
Liquid Ratio |
X |
Current Liabilities |
| |
|
1 |
X |
1500000 |
| |
|
|
|
|
| |
= |
1500000 |
|
|
| |
|
|
|
|
| Step 3 |
|
|
|
|
| Inventory |
= |
Current Assets |
- |
Quick Assets |
| |
|
4500000 |
- |
1500000 |
| |
= |
3000000 |
|
|
▶ Video Solution: Coming Soon
Question 26
| Step 1 |
|
|
|
|
| Current Ratio |
= |
Current Assets |
/ |
Current Liabilities |
| 2.5 |
= |
500000 |
|
CL |
| |
|
|
|
|
| Current Liabilities |
= |
Current Assets |
/ |
Current Ratio |
| |
|
500000 |
/ |
2.5 |
| |
= |
200000 |
|
|
| |
|
|
|
|
| Step 2 |
|
|
|
|
| Quick Ratio |
= |
Quick Assets |
/ |
Current Liabilities |
| 1 |
= |
QA |
|
200000 |
| |
|
|
|
|
| Quick Assets |
= |
Quick Ratio |
X |
Current Liabilities |
| or |
|
1 |
X |
200000 |
| Liquid Assets |
|
|
|
| |
= |
200000 |
|
|
| |
|
|
|
|
| Step 3 |
|
|
|
|
| Inventory |
= |
Current Assets |
- |
Quick Assets |
| |
= |
500000 |
- |
200000 |
| |
= |
300000 |
|
|
▶ Video Solution: Coming Soon
Question 27
| Step 1 |
|
|
|
|
| Current Liabilities |
= |
Total Debts |
- |
Long Term Debts |
| |
|
780000 |
- |
600000 |
| |
= |
180000 |
|
|
| |
|
|
|
|
| Step 2 |
|
|
|
|
| Working Capital |
= |
Current Assets |
- |
Current Liabilities |
| |
|
|
|
|
| 360000 |
= |
Current Assets |
- |
180000 |
| |
|
|
|
|
| Current Assets |
= |
Working Capital |
+ |
Current Liabilities |
| |
|
360000 |
|
180000 |
| |
= |
540000 |
|
|
| |
|
|
|
|
| Step 3 |
|
|
|
|
| Inventories |
= |
Current Assets |
- |
Quick Assets |
| 180000 |
|
540000 |
- |
Quick Assets |
| |
|
|
|
|
| Quick Assets |
= |
Current Assets |
- |
Inventories |
| or |
|
540000 |
- |
180000 |
| Liquid Assets |
|
|
|
| |
= |
360000 |
|
|
| |
|
|
|
|
| Step 4 |
|
|
|
|
| Liquid Ratio |
= |
Liquid Assets |
/ |
Current Liabilities |
| |
= |
360000 |
|
180000 |
| |
|
|
|
|
| |
= |
2:1 |
|
|
▶ Video Solution: Coming Soon
Question 28
| Step 1 |
|
|
|
|
|
|
| Current Liabilities |
= |
Total Debts |
- |
Non Current Liabilities |
| |
|
1800000 |
- |
1600000 |
|
|
| |
= |
200000 |
|
|
|
|
| |
|
|
|
|
|
|
| Step 2 |
|
|
|
|
|
|
| Working Capital |
= |
Current Assets |
- |
Current Liabilities |
| |
|
|
|
|
|
|
| 400000 |
= |
Current Assets |
- |
200000 |
|
|
| |
|
|
|
|
|
|
| Current Assets |
= |
Working Capital |
+ |
Current Liabilities |
| |
|
400000 |
|
200000 |
|
|
| |
= |
600000 |
|
|
|
|
| |
|
|
|
|
|
|
| Step 3 |
|
|
|
|
|
|
| Quick Assets |
= |
Current Assets |
- |
Inventories |
- |
Prepaid Expenses |
| |
|
600000 |
- |
190000 |
|
10000 |
| |
= |
400000 |
|
|
|
|
| |
|
|
|
|
|
|
| Step 4 |
|
|
|
|
|
|
| Quick Ratio |
= |
Quick Assets |
/ |
Current Liabilities |
| |
= |
400000 |
|
200000 |
|
|
| |
= |
2:1 |
|
|
|
|
▶ Video Solution: Coming Soon
Question 29
| |
Quick Ratio |
2:1 |
10:5 |
| |
|
|
|
| |
We assume the ratio to be 10:5 |
| |
Each transaction will be assumed to be of Rs 1 |
| |
|
|
|
| (a) |
Journal Entry |
|
| |
|
|
|
| |
Inventories A/c Dr.. |
|
|
1 |
|
|
|
| |
To Cash |
|
|
|
1 |
QA |
Reduce |
| |
Quick Ratio |
9 : 5 |
= |
1.8:1 |
| |
Quick Ratio |
Decline |
|
|
| |
|
|
|
|
| (b) |
Journal Entry |
|
|
| |
|
|
|
|
| |
Inventories A/c Dr.. |
|
|
1 |
|
|
|
| |
To Creditors |
|
|
|
1 |
CL |
Increase |
| |
Quick Ratio |
10 : 6 |
= |
1.67:1 |
| |
Quick Ratio |
Decline |
|
|
| |
|
|
|
|
| (c) |
Journal Entry |
|
|
| |
|
|
|
|
| |
Cash/Debtors A/c Dr.. |
|
|
20000 |
|
QA |
Increase |
| |
To Inventories |
|
|
|
20000 |
|
|
| |
Quick assets |
200000 |
(Assumed) |
|
| |
Current Liabilities |
100000 |
(Assumed) |
|
| |
|
|
|
|
|
| |
Revised QA |
220000 |
|
|
2:1 |
| |
Revised Q R |
220000/100000 |
2.2 |
2.20:1 |
| |
|
|
|
|
|
| |
Quick Ratio |
11 : 5 |
= |
2.2:1 |
|
| |
Quick Ratio |
Improve |
|
|
|
| |
|
|
|
|
|
| (d) |
Journal Entry |
|
|
|
| |
|
|
|
|
|
| |
Cash/Debtors A/c Dr.. |
|
|
22000 |
|
QA |
Increase |
| |
To Inventories |
20000 |
|
|
| |
To Profit & Loss |
|
|
|
2000 |
|
|
| |
Quick Ratio |
11 : 5 |
= |
2.2:1 |
| |
|
|
|
|
| |
Quick Ratio |
Improve |
|
|
| |
|
|
|
|
| (e) |
Journal Entry |
|
|
| |
|
|
|
|
| |
Cash A/c Dr.. |
|
|
|
|
QA |
Increase |
| |
To Trade Receivable |
|
|
|
|
QA |
Decrease |
▶ Video Solution: Coming Soon
Question 30
| |
Quick Ratio |
1:1 |
| |
|
|
| |
We assume the ratio to be 10:10 |
| |
Each transaction will be assumed to be of Rs 1 |
| |
|
|
| (a) |
Journal Entry |
| |
|
|
| |
Bills Payable A/c Dr.. |
|
|
1 |
|
CL |
Reduce |
|
|
|
| |
To Cash |
|
|
|
1 |
QA |
Reduce |
|
|
|
| |
Quick Ratio |
9 : 9 |
= |
1:1 |
| |
Quick Ratio |
No Impact |
|
| |
|
|
|
|
| (b) |
Journal Entry |
|
|
| |
|
|
|
|
| |
Debentures A/c Dr.. |
|
|
1 |
|
CL |
Reduce |
|
|
|
| |
To Equity Share Capital |
|
|
|
1 |
|
|
|
|
|
| Quick Ratio |
10 : 9 |
= |
1.11:1 |
| Quick Ratio |
Increase |
|
|
| |
|
|
|
| |
Note : |
Since the debentures were convertible in current year so these were part of current liabilities |
|
|
|
|
|
|
|
|
▶ Video Solution: Coming Soon
