Question

From the following information, compute the Current Ratio:

Trade receivable Rs 100000, Prepaid expenses Rs 10000, Cash Rs 30000, Short term

investment Rs 20000, Machinery Rs 7000, Bills payable Rs 20000, Creditors Rs 40000,

Debentures Rs 200000, Inventories Rs 40000, Expenses payable Rs 40000.​

Answer 1

5,00,000 = 3,20,000 + 1,30,000 + Current Liabilities ... Decrease in Cash by Rs 30,000 and therefore Current Assets will decrease to Rs 3 ... Long-Term Debt = Debentures = Rs 75,000

Answer 2

current ratio 1.8:1 1,80,000/100000