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Question
Current Ratio 3 : 1; Acid Test Ratio 0.9 : 1; Current Liabilities ₹ 1,20,000. Calculate Current Assets; Liquid Assets and Inventory.
Numerical
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Solution
Current Ratio = `"Current Assets"/"Current Liabilities"`
3 = `"Current Assets"/(₹ 1,20,000)`
Current Assets = ₹ 1,20,000 × 3
= ₹ 3,60,000
Acid Test Ratio = `"Liquid Assets"/"Current Liabilities"`
0.9 = `"Liquid Assets"/(₹ 1,20,000)`
Liquid Assets = ₹ 1,20,000 × 0.9
= ₹ 1,08,000
Inventory = Current Assets − Liquid Assets
= ₹ 3,60,000 − ₹ 1,08,000
= ₹ 2,52,000
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