Calculate debt-equity ratio fixed assets to total assets

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Reference no: EM13481946

Q NO.1:- From the following you are required to comment a upon the long term as well as short term solvency of the company:

Liabilities	Rs.	Assets	Rs.
Share Capital	5,00,000	Fixed Assets	6,00,000
Long term liabilities	2,50,000	Liquid Assets	3,00000
Current liabilities	2,500,000	Stock In Trade	1,00,000
Total	10,00,000	Total	10,00,000

Calculate debt-equity ratio, fixed assets to total assets ratio,current ratio and Assets ratio.

Q NO.2: Tariq and Co. signed an operating leasecontract effective for five year from January 1, 2008. He is to payRs.18000 at the start of the lease plus Rs.4000 monthly rentalthrough out the lease term. During January 2008, He spend Rs.10000for renovating the leased asset and also made additionalconstruction in the building with leaser's consent at a costof Rs.50000 , the estimated life of the additional construction is10 years, and its residual value is zero. The lease contract doesnot contain renewal option and may be terminated by the lessee with3 months notice.

You are required to give general entries inthe books of Tariq & Co. to reflect the renovation expenses,and rental payments for lease period.

Reference no: EM13481946

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