Question

acid test ratio 2:1 , inventory Rs 400000 , current ratio 4:1 .fund out current liabilities ?
please give me the answer of this question ⁉️​

Answer 1

Explanation:

• Acid Test Ratio = 2:1
• Current Ratio = 4:1
• Inventory = Rs 4,00,000
• Current Liabilities = ??

Solution :

• Acid Test Ratio = 2:1

Acid Test Ratio = Liquid Assets/Current Liabilities

• Current Ratio = 4:1

Current Ratio = Current Assets/Current Liabilities

Let,

• Current Liabilities = x
• Current Assets = 4x
• Liquid Assets = 2x

★ Liquid Assets = Current Assets - Inventory

2x = 4x - 4,00,000

4,00,000 = 4x - 2x

4,00,000 = 2x

2x = 4,00,000

x = 4,00,000/2

x = 2,00,000

Current Liabilities = Rs. 2,00,000

Therefore, Current Liabilities is Rs. 2,00,000.