Question

A Ltd has current ratio of 4.1 and quick ratio of 2.5:1 stock are valued at 22500 find out the total current assets and current liability

Answer 1

Formula

Current ratio = current asset  ÷ Current liabilities

Quick ratio - (current asset - stock)  ÷ Current liabilities

Answer :

Current liabilities = 15000

Current asset = 60000

Workings are attached below

Answer 2

Current liabilities = 14,062.5

Current Assets = 56,656.25

Explanation:

Given:

Current ratio = 4.1

Quick ratio = 2.5 : 1

Stock = 22,500

Computation:

Current ratio = Current assets / Current liabilities

4.1 = Current assets / Current liabilities

Current assets = 4.1 Current liabilities

Quick ratio = Quick assets / Current liabilities

2.5 = (Current assets - Stock) / Current liabilities

2.5 = (4.1 Current liabilities - Stock) / Current liabilities

2.5 Current liabilities = 4.1 Current liabilities - 22,500

22,500 = 4.1 Current liabilities - 2.5 Current liabilities

22,500 = 1.6 Current liabilities

Current liabilities = 14,062.5

Current Assets = 56,656.25

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