Let the current liabilities = x;
Current ratio = 3.5:1
Therefore, current assets = 3.5 x
Quick ratio = 2 :1
Therefore, quick or liquid assets = 2x
Liquid assets Current assets - Inventory
2x = 3.5x - 1,50,000
⇒ 2x - 3.5x - 1,50,000  (or)
1.5x = -1,50,000
x = \(\frac { 1,50,000 }{ 1.5 } \) = 1,00,000
Current liabilities = Rs.1,00,000
Current assets = 3.5 x 1,00,000
= Rs.3,50,000
Values that can be associated with the business are
(i) Doing Your Best : Business is doing its beast in keeping its liquidity ratios well above the ideal ratios.
(ii) Safety: Business shows safety towards its short-term creditors by maintaining such short-term solvency ratios.

(i) Gross profit ratio: Gross profit ratio is the proportion of gross profit to net revenue from operations. Gross profit ratio shows the margin of profit available out of revenue from operations. It is computed as below:
Gross profit ratio = \(\frac { Gross\quad profit }{ Net\quad revenue\quad from\quad operations } \) x 100
(ii) Net profit ratio: Net profit ratio is the percentage of net profit on revenue from operations. It is calculated as under:
Net profit ratio = \(\frac { Net\quad profit\quad after\quad tax }{ Revenue\quad from\quad operations } \) x 100

(i) Rights issue
Issue of equity shares to the existing shareholders of the company through a letter of offer is known as rights issue.
(ii) Bonus issue
Issue of equity shares to the existing shareholders of the company free of cost out of accumulated profit is known as bonus issue.

(i) Horizontal analysis
(1) When figures relating to several years are considered for the purpose of analysis, the analysis is called horizontal analysis.
(2) Comparative statements and trend percentages are examples of horizontal analysis.
(ii) Vertical analysis:
(1) When figures relating to one accounting year alone are considered for the purpose of analysis, the analysis is called vertical analysis.
(2) Preparation of common size statements and computation of ratios are examples of vertical analysis.

(a) Comparative statement
(i) A statement giving comparison of the net increase or decrease in the individual items of financial statements of two or more years of a business concern is called comparative statement.
(ii) It shows the actual figures at different periods of time, the increase or decrease in these figures in absolute terms and the percentages of such increase or decrease.
(b) Common srze statement:
(i) The common-size statements show the relationship of various items with some common base, expressed as percentage of the common base.
(ii) The common size statements include common-size income statement and common-size balance sheet.

The values highlighted are
(i) Social responsibility towards society.
(ii) Sensitivity towards cleaner environment

Values shown by the firm are
i. Responsibility :
Firm has shown responsibility towards senior citizens by giving them their dues.
ii. Compassion:
Partners have shown compassion towards senior citizens by fulfilling their duties towards senior citizens .

Values being affected are
(i) Reliablility: Value of reliability is affected as accounts maintained on single entry system are less reliable as they are prepared from incomplete records.
(ii) Accuracy: Value of arithmetical accuracy is affected, as in single entry system, trial balance cannot be prepared which proves arithmetical accuracy of accounts.

(i) Under this method, only one capital account is maintained for each partner.
(ii) The capital is changing from period to period.
(iii) This capital account shows always a credit balance
(iv) All adjustment relating to partners are recorded directly in the capital account.

Goodwill may be classified into acquired goodwill or self-generated goodwill.
(i) Acquired or purchased goodwill:
(1) Goodwill acquired by making payment in cash or kind is called acquired or purchased goodwill.
(2) The excess of purchase consideration over the value of net assets acquired is treated as acquired goodwill.
(ii) Self - generated goodwill:
It is the goodwill which is self generated by a firm based on features of the business such as favourable location, local customers, etc. Such self-generated goodwill cannot be recorded in the books of accounts.