5000000 It charges depreciation on straight line method at the rate of 10 every

5000000 it charges depreciation on straight line

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acquired a machine on 1st October 2015 at a cost of Rs.50,00,000. It charges depreciation on straight line method at the rate of 10% every year. The company purchased a new machine worth Rs.10,00,000 on 1st April 2017. Show the Machinery Account and Depreciation Account for the year ending 31st March 2016, 2017 and 2018. ANSWER 3:- MACHINERY ACCOUNT 1 2015 AMOUNT 2016 AMOUNT 1-Oct TO BANK A/C 5,000,000 31- Mar BY DEPRECIATION A/C 10% ON 5,000,000 FOR 6 MONTH 250,000 (5,000,000*10%*6/12) 31- Mar BY BALANCE C/D 4.750,000 5,000,000 5,000,00 0 2016 2017 1-Apr TO BALANCE B/D 4,750,000 31- Mar BY DEPRECIATION A/C 10% ON 5,000,000 500,000 31- Mar BY BALANCE C/D 4,250,000 4,750,000 4,750,00 0 2017 2018 1-Apr TO BALANCE B/D 4,250,000 31- Mar BY DEPRECIATION A/C
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10% ON 5,000,000 500,000 31- Mar BY BALANCE C/D 3,750,000 4,250,000 4,250,00 0 MACHINERY ACCOUNT 2 2017 AMOUNT 2018 AMOUNT 1-Apr TO BANK A/C 1,000,000 31- Mar BY DEPRECIATION A/C 10% ON 1,000,000 100,000 31- Mar BY BALANCE C/D 900,000 1,000,000 1,000,00 0 DEPRECIATIOON ACCOUNT 2016 AMOUNT 2016 AMOUNT 31- Mar TO MACHINERY ACCOUNT 1 250,000 31- Mar BY PROFIT & LOSS A/C 250,000 2017 AMOUNT 2017 AMOUNT 31- Mar TO MACHINERY ACCOUNT 1 5,000,000 31- Mar BY PROFIT & LOSS A/C 5,000,00 0 2018 AMOUNT 2018 AMOUNT 31- Mar TO MACHINERY ACCOUNT 1 500,000 31- Mar BY PROFIT & LOSS A/C 500,000 31- Mar TO MACHINERY ACCOUNT 2 100,000 31- Mar BY PROFIT & LOSS A/C 100,000 Problem 4 The following are the key Financial Ratios of . Analyze the different ratios and give suitable relevant interpretations for each category of ratios. Ratios March 2018 March 2017 March 2016 Investment Valuation Ratios Face Value 10 10 10
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Dividend Per Share 6 11 10.5 Operating Profit Per Share (Rs) 81.68 133.04 123.87 Net Operating Profit Per Share (Rs) 457.87 743.68 719.54 Free Reserves Per Share (Rs) -- -- -- Bonus in Equity Capital 81.9 64.85 65.07 Profitability Ratios Operating Profit Margin(%) 17.83 17.88 17.21 Profit Before Interest And Tax Margin(%) 14.13 13.88 12.69 Gross Profit Margin(%) 14.53 14.38 13.11 Cash Profit Margin(%) 14.48 15.92 15.36 Adjusted Cash Margin(%) 14.48 15.92 15.36 Net Profit Margin(%) 11.58 12.99 11.75 Adjusted Net Profit Margin(%) 11.26 12.54 11.38 Return On Capital Employed(%) 12.24 11.16 11.47 Return On Net Worth(%) 10.68 10.89 11.41 Adjusted Return on Net Worth(%) 10.68 10.89 11.41 Return on Assets Excluding Revaluations 496.68 886.76 741.2 Return on Assets Including Revaluations 496.68 886.76 741.2 Return on Long Term Funds(%) 12.71 11.85 11.99 Liquidity And Solvency Ratios Current Ratio 0.41 0.35 0.47 Quick Ratio 0.25 0.21 0.31 Debt Equity Ratio 0.31 0.35 0.38 Long Term Debt Equity Ratio 0.26 0.27 0.32 Debt Coverage Ratios Interest Cover 10.82 15.98 15.55 Total Debt to Owners Fund 0.31 0.35 0.38
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Financial Charges Coverage Ratio 12.88 19.08 19.45 Financial Charges Coverage Ratio Post Tax 10.28 15.65 16.07 Management Efficiency Ratios Inventory Turnover Ratio 7.72 7.79 8.96 Debtors Turnover Ratio 36.41 53.93 57.17 Investments Turnover Ratio 7.72 7.79 8.96
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Fixed Assets Turnover Ratio 0.95 0.96 1.23 Total Assets Turnover Ratio 0.72 0.64 1.26 Asset Turnover Ratio 0.72 0.67 0.73 Average Raw Material Holding -- -- -- Average Finished Goods Held -- -- -- Number of Days In Working Capital -131.04 -114.43 -71.1 Profit & Loss Account Ratios Material Cost Composition 72.63 72.14 69.38 Imported Composition of Raw Materials Consumed -- -- 91.71 Selling Distribution Cost Composition -- -- 3.54 Expenses as Composition of Total Sales 58.53 -- 59.11 Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit 9.68 -- 11.28 Dividend Payout Ratio Cash Profit 7.53 -- 8.36 Earning Retention Ratio 90.32 100 88.72 Cash Earning Retention Ratio 92.47 100 91.64 AdjustedCash Flow Times 2.24 2.54 2.5 Answer 4:-
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Analysis related to the key Financial Ratios with their relevant interpretations for each category of ratios as follows: 1. Investment Valuation Ratios Ratios March 2018 March 2017 March 2016 Investment Valuation Ratios Face Value 10 10 10 Dividend Per Share 6 11 10.5
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