[Pak Youth] FIN 621 Current Paper shared by Adnan Khalid

past se 70% mcqs thy

 

 subjective question

If a company uses Rs.20, 000 to buy merchandise for inventory. What do you think would be the effect on working capital? Give reason.?

 ans

If company purchase inventory on cash current assets of company increase and on the other hand cash is decrease.  So there is no effect in working capital. 

 

 

 why compny issued common stock on discount.wht is will be reason?Question No: 52    ( Marks: 5 ) 

 

 Following is the balance sheet of the ABC Company.ABC CorporationBalance SheetMar. 31, 1991  

Assets 

CashRs. 12,500

Notes receivables104,000

Accounts receivables (net)68,500

Inventories at cost50,000

 Plan & equipment (net of depreciation)646,000

Total assetsRs. 881,000

Liabilities & Stockholder's equity 

Accounts payableRs. 72,000

Notes payable54,500

Accrued liabilities 6,000

Common stock (60,000 shares, Rs. 10par)600,000

 Retained earnings148,500

Total liabilities and owner's equityRs. 881,000

 Requirement:Calculate the current ratio and quick ratio for both years. (2.5+ 2.5)       

 

   Current Ratio=Current Assets / Current Liabilities

                              =  235,000 / 132,500

                                = 1.77                                   

 

         Quick Ratio           = Current Assets - Inventories / Current Liabilities

                                       = (235,000 – 50,000) / 132,500

 

                                      = 185,000 / 132,500

                                      = 1.39

     

 

Question No: 46    (Marks: 5 )  Consider the following information.  Cash Rs. 15,000 Beginning net receivables Rs. 55,000 Ending net receivables Rs. 57,000 Net sales Rs. 640,000 Net credit sales Rs. 480,000 Cost of goods sold Rs. 390,000 Average inventory Rs. 62,000  Requirement:Compute the receivable turnover to the nearest tenth.  

 Receivables turn over ratio    = Net credit sales /Average Debtors

                                      = 480,000 / [(55,000+57,000)/2]

                                      = 480,000 / 56,000

                                      = 8.57

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Ghazala Jabbar

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