effect on proprietary ratio
issued equity shares to vendors of machinery purchased for rs.4,00,000
how does this transaction increase shareholders funds and total assets by the same amount
the ratio will increase because both the shareholder funds and total assets have increased with the same amount
the increase is same because machinery which is a part of fixed assets has increased with 400000 and equity shares being a part of shareholders fund has also increased by 400000
the increase is same because machinery which is a part of fixed assets has increased with 400000 and equity shares being a part of shareholders fund has also increased by 400000