CBSE Class 12-commerce Answered

1. Since debentures are issued to vendors for machinery being purchased, amount of machinery is paid in the form of debentures issued.Therefore, there is no cash paid to vendors for machinery purchased and no cash received for debentures issued. Hence, there is no cash flow.

 

2. From the information given, 
    Current Assets = Total Assets- Non-Current Assest =  10,00,000 - 5,00,000 = 5,00,000.
    Current Liabilities = (Total Liabilities+Shareholders funds) - Non-Current Liabilities;
    As per the accounting equaion:  Total Assets= Total Liabilties + Shareholders funds therefore, 10,00,000 = Total Liabilities + 6,00,000, Total Liabiliies= 4,00,000
    Also, Total Liabilities= Non-current + Current Liabilities. 4,00,000 = 2,00,000 + CUrrent Liabilities, Therefore, Current Liabitlies = 2,00,000
From the above information, Current Assets =5,00,000 and Current Liabilities = 2,00,000

Current Ratio = Current Assets / Current Liabilities = 5,00,000 / 2,00,000 = 2.5:1
Working Capital Turnover Rartio = Revenue from Operations / Working Capital 

                       = 15,00,000/(Current Assets - Current Liabilities)       

= 15,00,000/ (5,00,000-2,00,000)

= 15,00,000/3,00,000 = 5:1