Question : The ratio of Current Assets (Rs.16,00,000) to Current Liabilities (Rs.10,00,000) is 1.6: 1. The accountant of the firm is interested in maintaining a Current Ratio of 2: 1, by paying off a part of the Current Liabilities. The amount of the Current Liabilities will be that should be paid, so that the Current Ratio at the level 2: 1 may be maintained.
Option 1: Rs 4,00,000
Option 2: Rs 5,00,000
Option 3: Rs 8,00,000
Option 4: Rs 10,00,000
Correct Answer: Rs 4,00,000
Solution : Answer = Rs 4,00,000
C. Assets = 16,00,000
C. liab = 10,00,000
C.Ratio = 1.6:1
Let the amount of the current liab should be paid = $x$
$\frac{16,00,000-x}{10,00,000-x}$ = $\frac{2}{1}$
16,00,000-$x$ = 20,00,000 - 2$x$
$x$ = 4,00,000
C. liab should be paid = Rs. 4,00,000 Hence, the correct option is 1.
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