Question : A Company’s Current Ratio is 2: 1; Current Assets are Rs.2,50,000; Inventory is Rs.60,000 and Prepaid Expenses are Rs.5,000. Its Current Liabilities will be:
Option 1: Rs.1,50,000
Option 2: 1,25,000
Option 3: 1,35,000
Option 4: None of the above
Answer (1)
9th Jan, 2024
Correct Answer: 1,25,000
Solution :
Current Liabilities = 2,50,000; Inventory = 60,000; Prepaid Expenses =5,000; Current Ratio = 2:1
Current Ratio = Current Assets/ Current liability
2:1=2,50,000/Current liability
Current liability = 2,50,000/2=1,25,000
Hence option 2 is the correct answer.
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