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Question
Debentures ₹ 80,000, Trade Payables ₹ 1,20,000, Trade Receivables ₹ 90,000, Prepaid Expenses ₹ 10,000, Inventory ₹ 2,00,000 and Goodwill is ₹ 60,000. Current Ratio will be ______.
Options
1.5 : 1
2.5 : 1
3 : 1
1.8 : 1
MCQ
Fill in the Blanks
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Solution
Debentures ₹ 80,000, Trade Payables ₹ 1,20,000, Trade Receivables ₹ 90,000, Prepaid Expenses ₹ 10,000, Inventory ₹ 2,00,000 and Goodwill is ₹ 60,000. Current Ratio will be 2.5 : 1.
Explanation:
Current Assets = Trade Receivables + Prepaid Expenses + Inventory
= 90,000 + 10,000 + 2,00,000
= ₹ 3,00,000
Current Liabilities = Trade Payables = 1,20,000
Current Ratio = `"Current Assets"/"Current Liabilities"`
= `(3,00,000)/(1,20,000)`
= 2.5 : 1
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