3. (Current Ratio) Find out Current ratio.
Trade Receivable 33,000 ; Provision for Bad Debts * 3,000 ; Stock twice of net Debtors ;
Cash in hand 16,000 ; Advance to suppliers 15,000 ; Trade Payable 35,000 ;
Outstanding expenses ? 15,000 ; Prepaid expenses 35,000 Investment (Long term) * 12,000 ;
Ane Cumont notin ?. 11
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Explanation:
Current Assets=(Trade Receivable - provision for bad debts) + Stock(2 of net debtor) + Cash in hand + Advance to suppliers + Prepaid expenses
(33,000 -3000)+ (2× 30,000) + 16,000 + 15,000 + 5,000
Current Assets= 1,26,000
Current Liabilities=Trade Payable + Outstanding expenses = 35,000 + 15,000
Current Liabilities= 50,000
Current Ratio=Current Assets/Current Liabilities
Current Ratio=1,26,000/50,000
=2.52:1
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