Question

Current ratio 3.5:1 ,acid test ratio 2:1, inventory 30000, find current asset & total current liability

Answer 1

Answer:

Current liabilities = 20,000

Current assets = 70,000

Explanation:

Let current liabilities = X

Current ratio = $\frac{Current assets}{Current liaabilities}$ = 3.5

⇒ Current assets = 3.5X

Acid test ratio = $\frac{Liquid assets}{Current liabilities}$ = 2

⇒ Liquid assets = 2X

Liquid assets = Current assets - Inventory

⇒ 2X = 3.5X - 30,000

⇒ 1.5X = 30,000

⇒ X = 20,000

Current liabilities = X = 20,000

Current assets = 3.5X = 70,000