Question

31. Current liabilities include creditors Rs. 200,000. Bills payable Rs. 100,000. Expenses payable Rs. 50,000. Bank OD Rs. 200,000. Quick liabilities will be a) Rs.300,000 b) Rs. 350,000 c) Rs. 250,000 d) Rs. 200,000​

Answer 1

Answer:

Calculate current ratio and quick ratio from the following information.

Stock                                Rs.1,00,000

Debtors                            Rs.    80,000 

Bills receivables              Rs.    20,000

Advance Tax                    Rs.      8,000

Cash                                 Rs.    60,000

Creditors                          Rs.1,20,000

Bills payable                    Rs.    80,000

Bank overdraft                Rs.      8,000

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Solution

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Current assets = Stock + Debtors +BR + Advance tax + Cash

                          = 100000 + 80000 + 20000 + 8000 + 60000

                          = 268000

Current Liabilities = Creditors + BP + Bank OD 

                               = 120000 + 80000 + 8000

                               = 208000

Quick assets = Current assets - stock

                       = 268000 - 100000

                       = 168000

Current ratio = Current Assets / Current Liabilities 

                       = 268000/208000 

                       = 1.28

Quick ratio = Quick assets / Current Liabilities

                   = 168000/200000 

                   = 0.84