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Question
Current Ratio 2.5 : 1, Quick Ratio. 8 : 1, Current Assets ₹ 2,00,000. Calculate Current Liabilities, Quick Assets and Inventory.
Numerical
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Solution
1. Current Ratio = `"Current Assets"/"Current Liabilities"`
2.5 = `(₹ 2,00,000)/("Current Liabilities")`
Current Liabilities = `(₹ 2,00,000)/2.5`
= ₹ 2,00,000 × `10/25`
= ₹ 80,000
2. Quick Ratio = `"Quick Assets"/"Current Liabilities"`
0.8 = `"Quick Assets"/(₹ 80,000)`
Quick Assets = ₹ 80,000 × 0.8
= ₹ 64,000
3. Inventories = Current Assets − Quick Assets
= ₹ 2,00,000 − ₹ 64,000
= ₹ 1,36,000
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