7 Views

Question : A firm has a Current Ratio of 3.5: 1 and a Quick Ratio of 2: 1. If its inventory is Rs.75,000, total current assets and total current liabilities are

Option 1: Current assets Rs 2,16,000 and current liabilities Rs 48,000

Option 2: Current assets Rs 1,08,000 and current liabilities Rs 24.000

Option 3: Current assets Rs 1,75,000 and current liabilities Rs 50,000

Option 4: None of the above


Team Careers360 11th Jan, 2024
Answer (1)
Team Careers360 22nd Jan, 2024

Correct Answer: Current assets Rs 1,75,000 and current liabilities Rs 50,000


Solution : Answer = Current assets Rs 1,75,000 and current liabilities Rs 50,000

Current Ratio = 3.5:1; Quick Ratio = 2:1; Inventory =  Rs.75,000.

C.ratio = $\frac{C.A.}{C.Liab}$= $\frac{3.5}{1}$ = C.A. = 3.5 x C.liab

Quick ratio = $\frac{Q.A.}{C.Liab}$ = Q.A. = 2 x Current liab

Q.A = C.A. - Stock; 2C.Liab = 3.5 C.Liab - 75,000

1.5 Current Liab = 75,000; Current Liab. = Rs 50,000

Total Current Assets = 3.5 (50,000) = 1,75,000.
Hence, the correct option is 3.

Related Questions

Chandigarh University Admissi...
Apply
Ranked #1 Among all Private Indian Universities in QS Asia Rankings 2025 | Scholarships worth 210 CR
Amity University Noida MBA Ad...
Apply
Amongst top 3% universities globally (QS Rankings)
Amity University Noida B.Tech...
Apply
Among Top 30 National Universities for Engineering (NIRF 2024) | 30+ Specializations | AI Powered Learning & State-of-the-Art Facilities
Jindal Global Law School Admi...
Apply
Ranked #1 Law School in India & South Asia by QS- World University Rankings | Merit cum means scholarships | Regular Admissions Deadline: 30th Apr'25
VIT - VITEEE 2025
Apply
National level exam conducted by VIT University, Vellore | Ranked #11 by NIRF for Engg. | NAAC A++ Accredited | Last Date to Apply: 31st March | NO...
Symbiosis-SITEEE-2025
Apply
Gateway for admissions to Engineering courses @ Symbiosis | NAAC A++ Grade | Among top 31 in India (NIRF 2024)
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books