Question

current ratio=2.5,working capital=60000

Then What is Current Assets and Current Liabilities?

Answer 1

therefore, C.A =100000 and C.L =40000

Answer 2

Answer: The Current Assets is Rs. 1,00,000 and Current Liabilities is Rs.40,000.

Explanation:  Given that the Current ratio is 2.5 and working capital is Rs.60,000.

We are to find the Current Assets and Current Liabilities.

We are given the following information :

Current Ratio= 2.5

Working Capital= 60,000

We have

$\textup{Current Assets}-\textup{Current Liabilities}=\textup{Working Capital}\\\\\textup{C.A}-\textup{C.L}=60,000~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~(i)$

Also, we know that

$\textup{Current Ratio}=\dfrac{\textup{Current Assets}}{\textup{Current Liabilities}}\\\\\Rightarrow2.5=\dfrac{\textup{C.A}}{\textup{C.L}}\\\\\Rightarrow2.5\textup{C.L}=\textup{C.A}~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~(ii)$

Using equation (ii) in equation (i), we get

$\textup{C.A}-\textup{C.L}=60,000\\\\\Rightarrow2.5\textup{C.L}-\textup{C.L}=60,000\\\\\Rightarrow1.5\textup{C.L}=60,000\\\\\Rightarrow\textup{C.L}=\dfrac{60,000}{1.5}=40,000$

and from equation (i), we again get

$\textup{C.A}-\textup{C.L}=60,000\\\\\Rightarrow\textup{C.A}-40,000=60,000\\\\\Rightarrow\textup{C.A}=60,000+40,000=1,00,000.$

Thus, the Current Assets is Rs. 1,00,000 and Current Liabilities is Rs.40,000.