Question : A firm had current assets of Rs.3,00,000 It then paid trade payables of Rs.50,000. After this payment, the current ratio was 2.5:1 The amount of Current Liabilities and Working Capital after the payment are ___________.
Option 1: Current liabilities are Rs 1,50,000 and working capital are Rs 2,10,000
Option 2: Current liabilities are Rs 2,10,000 and working capital are Rs 1,50,000
Option 3: Current liabilities are Rs 1,00,000 and working capital is Rs 1,50,000
Option 4: None of the above
Correct Answer: Current liabilities are Rs 1,00,000 and working capital is Rs 1,50,000
Solution : Answer = Current liabilities are Rs 1,00,000 and working capital is Rs 1,50,000.
Current Assets = 3,00,000
Now, Current Assets = 3,00,000 - 50,000 = 2,50,000
New Current Ratio = 2.5:1
C. Ratio= $\frac{\text{Current Assets}}{\text{Current Liab}}$
$\frac{2.5}{1}$= $\frac{2,50,000}{\text{Current Liab}}$
Current liab.= $\frac{2,50,000}{2.5}$= 1,00,000
New Working Capital = New current assets - New current liabilities. = 2,50,000 - 1,00,000 = 1,50,000. Hence, the correct option is 3.
Question : Working Capital Rs.6,00,000; Trade Payables Rs. 50,000 and other Current Liabilities Rs.1,50,000 Current ratio will be___________.
Question : The ratio of Current Assets (Rs.3,00,000) to Current Liabilities is Rs.2,00,000 then the ratio is 1.5:1. The accountant of this firm is interested in maintaining a Current Ratio of 2:1 by acquiring some Current Assets on Credit. The amount of Current Assets which must be
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