Q. 57 Solution of Accounting Ratios Chapter TS Grewal Book Class 12 2021-22

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Question number 57 of the Accounting Ratios chapter is a practical one.

Solution of Question Number 57 of Accounting Ratios Chapter of TS Grewal Book 2021-22 Class 12

Statement	Effect	Reason
Obtained a loan of ₹ 5,00,000 from State Bank of India payable after five years	Decline	Total Assets increases. due to increase in denominator overall ratio wold decline
Purchased machinery of ₹ 2,00,000 by cheque	No Change	one assets is converting into another assets. No change either on shareholders funds or Total assets.
Redeemed 7% Redeemable Preference Shares ₹ 3,00,000	Decline	Shareholders funds and total assets decreasing with the same amount. as proprietary ratio is less than one. Due to decrease in numerator and denominator with the same amount. overall ratio will decline.
Issued Equity shares to the vendor of building purchased for ₹ 7,00,000.	Imporove	Shareholders funds and total assets increasing with the same amount. as proprietary ratio is less than one. Due to increase in numerator and denominator with the same amount. the overall ratio will improve.
Redeemed 10% redeemable debentures of ₹ 6,00,000	Improve	It will decrease total assets. due to a decrease in denominator only. The overall ratio would improve.