Skip to content
doubtly
Sign up
Log in to upvote 0 Log in to downvote

Pavitra Co. Ltd. issued ₹ 20,00,000 capital divided into equity shares of ₹ 100 each at a premium of ₹ 20 per share. Amount payable as:₹ 20 on Application₹ 40 on Allotment (including ₹ 10 premium)₹ 60 on First and Final call (including ₹ 10 premium)C…

Q.5 Pavitra Co. Ltd. issued ₹ 20,00,000 capital divided into equity shares of ₹ 100 each at a premium of ₹ 20 per share. Amount payable as:

  • ₹ 20 on Application
  • ₹ 40 on Allotment (including ₹ 10 premium)
  • ₹ 60 on First and Final call (including ₹ 10 premium)

Company received applications for all shares. All the money due on allotment and first and final call was duly received.

Pass Journal Entries in the books of Pavitra Co. Ltd.

OR

Trading and Profit and Loss Account for the year ended 31st March 2022

Dr. ParticularsAmount (₹)Cr. ParticularsAmount (₹)
To Opening Stock4,00,000By Sales24,00,000
To Purchases18,00,000By Closing Stock6,00,000
To Wages2,00,000
To Gross Profit c/d6,00,000
Total30,00,000Total30,00,000
To Office Expenses2,50,000By Gross Profit b/d6,00,000
To Selling Expenses2,00,000
To Finance Expenses60,000
To Net Profit c/d90,000
6,00,0006,00,000

Company had following current assets and current liabilities: Debtors ₹ 1,20,000, Creditors ₹ 60,000, Stock ₹ 60,000, Bills Payable ₹ 40,000, Loose Tools ₹ 20,000, Bank Overdraft ₹ 20,000.

Calculate following ratios: (1) Gross Profit Ratio (2) Operating Ratio (3) Net Profit Ratio (4) Current Ratio

Doubtly Asked Board exam · March 2026 hsc 12th Save WhatsApp Report
Sign in to comment

1 answer

Log in to upvote 0 Log in to downvote

Best answer

Answer: 20,000 shares; Equity Share Capital credited ₹ 20,00,000 and Securities Premium ₹ 4,00,000; total cash received ₹ 24,00,000.

Number of shares = ₹ 20,00,000 ÷ ₹ 100 = 20,000. Application 20,000 × 20 = ₹ 4,00,000; Allotment 20,000 × 40 = ₹ 8,00,000 (capital ₹ 6,00,000 + premium ₹ 2,00,000); First and Final call 20,000 × 60 = ₹ 12,00,000 (capital ₹ 10,00,000 + premium ₹ 2,00,000).

Journal of Pavitra Co. Ltd.

ParticularsDebit (₹)Credit (₹)
Bank A/c ............ Dr.
To Equity Share Application A/c
(Being application money received on 20,000 shares @ ₹ 20)		4,00,000
4,00,000
Equity Share Application A/c ............ Dr.
To Equity Share Capital A/c
(Being application money transferred to capital)		4,00,000
4,00,000
Equity Share Allotment A/c ............ Dr.
To Equity Share Capital A/c
To Securities Premium A/c
(Being allotment money due @ ₹ 40 including ₹ 10 premium)		8,00,000
6,00,000
2,00,000
Bank A/c ............ Dr.
To Equity Share Allotment A/c
(Being allotment money received)		8,00,000
8,00,000
Equity Share First and Final Call A/c ............ Dr.
To Equity Share Capital A/c
To Securities Premium A/c
(Being first and final call due @ ₹ 60 including ₹ 10 premium)		12,00,000
10,00,000
2,00,000
Bank A/c ............ Dr.
To Equity Share First and Final Call A/c
(Being call money received)		12,00,000
12,00,000

OR (Ratios)

Answer: Gross Profit Ratio 25%; Operating Ratio 93.75%; Net Profit Ratio 3.75%; Current Ratio 1.67 : 1.

  1. Gross Profit Ratio = Gross Profit ÷ Net Sales × 100 = 6,00,000 ÷ 24,00,000 × 100 = 25%.
  2. Operating Ratio = (Cost of goods sold + Operating expenses) ÷ Net Sales × 100.
    Cost of goods sold = Opening Stock + Purchases + Wages – Closing Stock = 4,00,000 + 18,00,000 + 2,00,000 – 6,00,000 = ₹ 18,00,000.
    Operating expenses = Office Expenses + Selling Expenses = 2,50,000 + 2,00,000 = ₹ 4,50,000 (finance expenses are non-operating).
    Operating Ratio = 22,50,000 ÷ 24,00,000 × 100 = 93.75%.
  3. Net Profit Ratio = Net Profit ÷ Net Sales × 100 = 90,000 ÷ 24,00,000 × 100 = 3.75%.
  4. Current Ratio = Current Assets ÷ Current Liabilities.
    Current Assets (as given) = Debtors 1,20,000 + Stock 60,000 + Loose Tools 20,000 = ₹ 2,00,000.
    Current Liabilities = Creditors 60,000 + Bills Payable 40,000 + Bank Overdraft 20,000 = ₹ 1,20,000.
    Current Ratio = 2,00,000 ÷ 1,20,000 = 1.67 : 1.

Loose tools are included because the question lists them among the current assets (they form part of inventories). If loose tools are excluded, current ratio = 1,80,000 ÷ 1,20,000 = 1.5 : 1.

Note: if finance expenses are also treated as operating expenses, the operating ratio is 22,50,000 + 60,000 = 23,10,000 ÷ 24,00,000 × 100 = 96.25%.

Doubtly AI · 28 Oct 2026 AI-verified · Oct 2026 Report
Was this answer helpful?
Sign in to comment

Your answer

Log in or create a free account to answer this question.