Question

. 35. A Company's Quick Ratio is 1.5 : 1; Current Liabilities are *2,00000 and
Inventory is 1,80,000. Current Ratio will be :​

Answer 1

Answer:

3,20,000

Explanation:

Current Assets = 3,20,000

Quick Assets = 2,40,000

Inventory = 80,000

Current Ratio = 2 : 1

Current Liabilities = 1,60,000

Quick Ratio = 1.5 : 1

Current Assets = 1,60,000 × 2

Current Assets = 3,20,000

Quick Ratio = 1.5 : 1

Quick Assets = 1,60,000 × 1.5

Quick Assets = 2,40,000

Quick Assets = Current Assets - Inventory

2,40,000 = 3,20,000 - Inventory

Inventory = 3,20,000 - 2,40,000

Inventory = 80,000

∴ Current Assets = 3,20,000

Quick Assets = 2,40,000

Inventory = 80,000

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Answer 2

Explanation:

Solution :

Quick Ratio is 1.5 : 1

Current Liabilities are 2,00000

Inventory is 1,80,000

Current Ratio = ??

• Quick Ratio = Quick Assets/Current Liabilities

Quick Assets/2,00000 = 1.5/1

Quick Assets = 2,00000 × 1.5

Quick Assets = 3,00,000

• Current Ratio = Current Assets/Current Liabilities

• Current Assets = Quick Assets + Inventory

Current Assets = 3,00,000 + 1,80,000

Current Assets = 4,80,000

• Current Ratio = Current Assets/Current Liabilities

Current Ratio = 4,80,000/2,00000

Current Ratio = 2.4 : 1

Therefore, Current Ratio will be 2.4 : 1