(b) The following financial information has been extracted from the records of M/s Durga & Co. as at 31st March, 2026: Particulars Amount /…

(b) Working notes: (i) Current Assets and Current Liabilities computation: Current assests = 2.5 Currect liabilities 1 Or Current assets = 2.5 Current liabilities Now, Working capital = Current assets – Current liabilities Or ₹4,80,000 = 2.5 Current liability – Current liability Or 1.5 Current liability = ₹4,80,000 ∴ Current Liabilities = ₹3,20,000 So, Current Assets = ₹3,20,000 × 2.5 = ₹8,00,000 (ii) Computation of stock. Liquid ratio = Liquid assets Current liabilities Or 1.5 = Current assets - Inventories ₹3,20,000 Or 1.5 × 3,20,000 = ₹8,00,000 – Inventories Or Inventories = ₹8,00,000 – ₹4,80,000 Or Stock = ₹3,20,000 (iii) Computation of Proprietary fund; Fixed assets; Capital and Sundry creditors Fixed Asset to Proprietary ratio = Fixed assets = 0.75 Proprietary fund ∴ Fixed Assets = 0.75 Proprietary fund (PF)[FA + NWC or NWC = PF] = PF- FA [(i.e. .75 PF)] and Net Working Capital (NWC)= 0.25 Proprietary fund Or 4,80,000 = Proprietary fund 0.25 Or Proprietary fund = ₹19,20,000 and Fixed Assets = 0.75 proprietary fund = 0.75 × ₹19,20,000 = ₹14,40,000 Capital = Proprietary fund – Reserves & Surplus = ₹19,20,000 – ₹3,20,000 = ₹16,00,000 Sundry Creditors = (Current liabilities – Bank overdraft) = (₹3,20,000 – ₹80,000) = ₹2,40,000 Balance Sheet as at 31 st March, 2020 Liabilities ₹ Assets ₹ Capital 16,00,000 Fixed Assets 14,40,000 Reserves & Surplus 3,20,000 Stock 3,20,000 Bank overdraft 80,000 Other Current Assets 4,80,000 Sundry creditors 2,40,000 22,40,000 22,40,000