Question

From the following compute Current Ratio:

	₹			₹
Trade Receivable (Sundry Debtors)	1,80,000		Bills Payable	20,000
Prepaid Expenses	40,000		Sundry Creditors	1,00,000
Cash and Cash Equivalents	50,000		Debentures	4,00,000
Marketable Securities	50,000		Inventories	80,000
Land and Building	5,00,000		Expenses Payable	80,000

Answer 1

Current Assets = Trade Receivables + Pre-paid Expenses + Cash and Cash Equivalents +
Marketable Securities + Inventories
= Rs 1,80,000 + Rs 40,000 + Rs 50,000 + 50,000 + 80,000 = Rs 4,00,000

Current Liabilities = Bills Payable + Sundry Creditors + Expenses Payable
= Rs 20,000 + Rs 1,00,000 + Rs 80,000 = Rs 2,00,000

`"Current Ratio" = "Current Assets"/"Current Liabilities" = 400000/200000` = 2 : 1