Question

The following are the balance sheets of Devi Company Limited at the end of 2011 and 2012. Prepare a comparative Balance Sheet and study the financial position of the conL

Liabilities	Rs.2011	Rs.2012	Assets	Rs.2011	Rs.2012
Equity capital	1,20,000	1,85,000	Fixed assets	1,40,000	1,95,000
preference capital	70,000	95,000	stock	40,000	45,000
Reserves	30,000	35,000	Debtors	70,000	82,000
p & L	17,500	20,000	Bills receivables	20,000	50,000
Bank overdraft	35,000	45,450	prepaid expenses	6,000	8,000
Creditors	25,000	45,450	cash at bank	40,000	48,500
provision for taxation	15,000	22,500	cash in hand	5,000	29,000
proposed dividend	8,500	20,050
	3,21,000	4,58,000		3,21,000	4,58,000

Answer 1

Comments

(i) Change in current assets and current Liabilities is almost same. It indicates that ratio is same as of previous year. 

(ii) Fixed Assets have increased along with share capital which shows that assets are purchased with long term sources of finance. 

(iii) The overall financial position of company is satisfactory.

Working note: