1. Current ratio = 2 :1
Quick Ratio = 1 :1
Stock Rs.20,000
Prepaid Expenses Rs.10,000
Current Assets, Current Liabilities and Quick Assets
Answers
Answer:
Explanation:
The question will be solved in terms of Mathematical way.
Current Assets
Current Ratio= --------------------
Current liabilities
Considering factor as x
Means = 2x : 1x =Current Assets = 2 Current Liabilities
=======================================
Current Assets -Stock-Prepaid
Quick Ratio= -------------------------------------------
Current Liabilities
Means Current Assets-Stock -Prepaid = Current Liabilities
Putting values in the equation
Current Assets -20000-10000=Current Liabilities
2 current liabilities -30000=current liabilities
-30000=-2current liabilities -current liabilities
30000=Current liabilities
60000=Current Assets
Now what are quick assets
Quick Assets = These are those Assets that can quickly be converted to cash.
Quick Assets = Current Assets -Inventories-Prepaid expense
=60000-20000-10000
=30000