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Question
| ₹ | |
| Current Assets (including prepaid expenses ₹ 20,000) | 10,20,000 |
| Trade Payables | 3,00,000 |
| Short-term Borrowings | 1,40,000 |
| 8% Debentures | 1,00,000 |
| Provision for Tax | 50,000 |
| Calls in Advance | 10,000 |
Current Ratio will be:
Options
2.04 : 1
2 : 1
1.7 : 1
1.67 : 1
MCQ
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Solution
2.04 : 1
Explanation:
Current Ratio = `"Current Assets"/"Current Liabilities"`
Current Assets = ₹ 10,20,000
Current Liabilities = Trade Payables + Short-term Borrowings + Provision for Tax + Calls in Advance
= 3,00,000 + 1,40,000 + 50,000 + 10,000
= ₹ 5,00,000
Current Ratio = `"10,20,000"/"5,00,000"`
= 2.04 : 1
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