Question

The following information is obtained from the books of Devdutt Ltd.:

Working capital - ₹ 4,00,000
Trade Payables - ₹ 50,000
Other Current liabilities - ₹ 1,00,000

Current assets of Devdutt Ltd. are:

Options

• ₹ 2,50,000

• ₹ 4,50,000

• ₹ 5,00,000

• ₹ 5,50,000

Answer 1

₹ 5,50,000

Explanation:

We know:

Working Capital = Current Assets − Current Liabilities

Given:

Working Capital = ₹ 4,00,000

Trade Payables = ₹ 50,000

Other Current Liabilities = ₹ 1,00,000

So,

Current Liabilities = 50,000 + 1,00,000 = 1,50,000

Therefore,

Current Assets = Working Capital + Current Liabilities

= 4,00,000 + 1,50,000

= 5,50,000