Aradya Ltd. had debt equity ratio of 2.5 : 1. State which of the following transaction will not effect the Debt Equity Ratio : Option 1: Purchase of Rs. 15,00,000 machinery by taking bank loan of Rs. 12,00,000 Option 2: Rs. 2,00,000 paid to creditors Option 3: Conversion of Rs. 1,00,000 debentures into Equity shares of Rs. 100 each Option 4: Sale of furniture (book value of Rs. 5,00,000) for Rs. 5,50,000

The answer is 'Rs. 2,00,000 paid to creditors'. View full solution:

CUET Accountancy - Aradya Ltd. had debt equity ratio of 2.5 : 1. State which of the following transaction will not effect the Debt Equity Ratio : | PYQs + Solutions

CUET Accountancy 2023 28 May Shift 1

Financial Statements

Medium

Purchase of Rs. 15,00,000 machinery by taking bank loan of Rs. 12,00,000

Rs. 2,00,000 paid to creditors

Conversion of Rs. 1,00,000 debentures into Equity shares of Rs. 100 each

Sale of furniture (book value of Rs. 5,00,000) for Rs. 5,50,000

✅ Correct Option: 2