Question

Current ratio 2.5, liquid ratio 1.5 and working capital 60,000. What is current assets

Answer 1

Answer:

Current asset = 1,00,000

Explanation:

Let Current asset = CA

Current liabilities =CL

Working Capital = CA-CL

60000  =CA-CL

CA =60000-CL       -------   1st equation

Current ratio= CA/CL

2.5/1  = CA/CL

2.5/1  = 60000CL/  CL

2.5CL = 60000 CL

2.5-1 CL = 60000

1.5 CL   = 60000

CL= 60000/1.5

CL  = 40,000

Working capital = CA-CL

60000 = CA- 40000

CA= 60000+40000

CA= 1,00,000

   

Answer 2

Current assets = 1,00,000

Explanation:

Given:

Current ratio = 2.5

Liquid ratio = 1.5

Working capital = 60,000

Current assets = ?

Computation:

Current ratio = Current assets / Current Liabilities

2.5 = Current assets / Current Liabilities

Current assets = 2.5 Current Liabilities

Working capital = Current assets - Current Liabilities

Working capital = 2.5 Current liabilities - Current Liabilities

60,000 = 1.5 Current liabilities

Current liabilities = 40,000

Current assets = Working capital + Current liabilities

Current assets = 60,000 + 40,000

Current assets = 1,00,000

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