Amount P.6.11 Below is given the balance sheet of Best Ltd, as on March 31, of the current year Equity and Liabilities Amount Assets Equity share capital 20,00,000 Fixed assets (cost) 750,00,000 7.5% Preference share capital 10,00,000 Depreciation written-oft 16,00,000 General reserve 4.00.000 34,00,000 6% Debentures 6,00.000 Stock 6.00,000 Sundry creditors 10,00.000 Sundry debtors 8.00,000 Cash 2,00,000 50,00.000 50,00,000 The following additional information is available: (1) Fixed assets costing 10,00,000 to be installed on April 1, and would become operative on that date, payment to be made on March 31 of next year. (2) The fixed assets turnover ratio (on the cost of the fixed assets) would be 15. (3) The stock tumover riatic would be 14.4 (calculated on the basis of the average of the opening and closing stocks). (4) The break-up of cost and profit would be as follows (percentages): Materials 40 Labour 25 Manufacturing expenses Office and selling expenses 10 Depreciation Profit 10 Sales The profit is subject to debenture interest and taxation e 35 per cent. (5) Debtors would be 1/9 of turnover. (6) Creditors would be 1/5 of materials consumed. (7) In March next year a dividend of 10 per cent on equity capital would be paid (8) 85,00,000, 6% debentures would be issued on April 1. next year. You are required to prepare the forecast balance sheet as on March 31, next year and calculate the resultant (a) Current ratio: (b) Fixed Assets/Net worth ratio; and c) Debt-equity ratio (The turnover above refers to the value of sales). 10 5 y20 100