Question

Attempted Questions: 26
Question 37
Current assets Increase by 42000 and
decrease by 36000 current Liabilities
is increase by 21000 and decrease by
3000 then working capital
Options​

Answer 1

Long term liabilities are not taken into account while computing WC. Hence the conversion of preference shares into equity will not have any of the above impact on working capital.

Both debtors and cash come under the category of current assets. So when an amount of Rs.3,000 is realize from debtors, then it will not effect current assets or working capital. So there will be no change in working capital.