Question

Current ratio is 3:2 and working capital is rs.100000. Calculate the amount of current assets and current liabilities.

Answer 1

Current ratio = current asset / current liabilities

let Current assets = CA

Current liabilities = CL

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Current ratio = CA/Cl

3/2  = CA/ CL

2 CA = 3 CL

CA = 3CL /2 - Equation 1

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Working capital = CA - CL

100000 = CA - CL

Substitute equation 1 in CA

100000 = ( 3CL/2) - CL

100000 = (3CL - 2 CL)/ 2

100000 * 2 = 3CL -2CL

200000 = CL

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CA = 3 CL /2

CA = 3(200000) /2

CA = 600000/2

CA = 300000

therefore

Current liabilities = 200000

Current assets = 300000

Answer 2

Answer:

Current liabilities = 200000

Current assets = 300000

Explanation:

Current ratio = current asset / current liabilities

let Current assets = C A

Current liabilities = C L

Current ratio = C A / C l

3 / 2  = C A / C L

2 CA = 3 CL

C A = 3 C L / 2 - Equation 1

Working capital = C A - C L

1 0 0 0 0 0 = C A - C L

Substitute equation 1 in C A

1 0 0 0 0 0 = ( 3CL/2) - CL

1 0 0 0 0 0 = ( 3 C L - 2 CL ) / 2

1 0 0 0 0 0 * 2 = 3 C L - 2 C L

2 0 0 0 0 0 = C L

C A = 3 C L / 2

C A = 3 ( 2 0 0 0 0 0 ) / 2

C A = 6 0 0 0 0 0 / 2

C A = 3 0 0 0 0 0

therefore

Current liabilities = 200000

Current assets = 300000

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