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Question
| Particulars | ₹ | ₹ |
| Cash at Bank | 35,000 | |
| 10% Investments (interest is accrued for 3 months) | 40,000 | |
| Trade Receivables | 1,00,000 | 96,000 |
| Less: Provision for Doubtful Debts | 4,000 | |
| Advance Tax | 8,000 | |
| Computers | 20,000 | |
| Inventory | 80,000 | |
| Current Liabilities | l,00,000 |
Current Ratio will be:
Options
2.6 : 1
2.24 : 1
2.2 : 1
2.4 : 1
MCQ
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Solution
2.2 : 1
Explanation:
Current Ratio = `"Current Assets"/"Current Liabilities"`
10% Investments (interest accrued for 3 months) = `40,000 xx 10/100 xx 3/12`
= ₹ 1,000
Current Assets = Cash at Bank + Accrued Interest on Investments + Trade Receivables + Advance Tax + Inventory
= 35,000 + 1,000 + 96,000 + 8,000 + 80,000
= ₹ 2,20,000
Current Ratio = `(2,20,000)/(1,00,000)`
= 2.2 : 1
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