Question

current ratio=3.5:1. quick ratio =2.1. inventories = 24000. calculate current asstes?​

Answer 1

Answer:

Explanation:

use formula of current ratio = current assets / current liabilities ( without inventory )

hence :

    X/Y = 3.5   therefore X = 3.5Y

and also use quick ratio  = current assets / current liabilities ( with inventory)

hence use:

         ( X + 24000) / Y = 2

             therefore X+ 24000 = 2Y

replace x with the first formula

         3.5Y + 24000 = 2Y

find  y... which will become 16000 ---- this is the current liabilities

use this to get current assets

which is:

X = 3.5 * 16000

=56000 ----current assets

Answer 2

72,000

Explanation:

Given:

Current ratio = 3.5 : 1

Quick ratio = 2 : 1

Inventory = 24000

Computation:

Current ratio = current assets / current liabilities

3.5 = current assets / current liabilities

3.5 current liabilities = current Asset.........Eq 1

Quick ratio = (current assets - Inventories) / current liabilities

2 = (current assets - 24,000) / current liabilities

2 Current liabilities = Current assets - 24000 ..... Eq 2

Multiply by 1.5 in Eq 2.

3.5 Current liabilities = 1.5 Current assets - 36000..... Eq 3

From Eq 3 - Eq 1

0.5 Current Assets = 36000

Current assets = 36000 / 0.5

= 72,000

Learn more:

Current assets and inventory as 31 march

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