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X Ltd. Has a Current Ratio of 3.5 : 1 and Quick Ratio of 2 : 1. If the Inventories is ₹ 24,000; Calculate Total Current Liabilities and Current Assets. - Accountancy

Sum

X Ltd. has a Current Ratio of 3.5 : 1 and Quick Ratio of 2 : 1. If the Inventories is  ₹  24,000; calculate total Current Liabilities and Current Assets.

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Solution

`"Current Ratio" = "Current Assets"/ "Current liability" = 3.5/1`

`"Quick Ratio" = "Quick Assets"/"Current Liabilities" = 2/1`

Let Current Liabilities be = x

Current Assets = 3.5 x

Quick Assets = 2 x

Stock = Current Assets − Quick Assets

24,000 = 3.5 x − 2 x

or, 24,000 = 1.5 x

x = 16,000

Current Liabilities = x = Rs 16,000

Current Assets = 3.5 x = 3.5 × 16,000 = Rs 56,000 

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APPEARS IN

TS Grewal Class 12 Accountancy - Analysis of Financial Statements
Chapter 3 Accounting Ratios
Exercise | Q 20 | Page 93
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