current assets of company were 720000 and its current ratio was 2.4:1 afterwards it made payment of rs 100000 to its creditors. calculate the current ratio after the payment
Answers
Answer:
Given,
Current liabilities = Rs-1,75,000
Current Ratio = 2:1
If 30,000 is paid to a creditor it will reduce both current assets as well as current liabilities as cash is being paid and creditors are reduced. Hence, new ratio will be:-
Current Ratio = Current Assets
-------------------------
Current liabilities
= 3,50,000 (WN 1) - 30,000
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1,75,000 - 30,000
= 3,20,000
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1,45,000
= 2.2 : 1
Working note 1) = Current assets
Current Ratio = Current Assets
-------------------------
Current liabilities
Current Assets = Current liabilities x current ratio
= 1,75,000 x 2
= 3,50,000.
Answer:
current ratio = current assets/current liabilities
current liabilities = 7,20,000/2.4 = 3,00,000
current assets after payment = 7,20,000 - 1,00,000 = 6,20,000
current liabilities after payment = 3,00,000- 1,00,000 = 2,00,000
current ratio = current assets / current liabilities
= 6,20,000/2,00,000
= 3.1 : 1