Question

From the following information, find out
(i)
current assets
(ii)
current liabilities
(iii) value of inventory
(1)
current ratio = 3.5
(2)
liquid ratio = 2.5
(3)
working capital = Rs. 1,00,000​

Answer 1

(i). Current Assets = 1,40,000

(ii). Current Liabilities = 40,000

(iii). Value of Inventory = 40,000

Explanation:

Solution :

Current Ratio = 3.5 (Given)

Current Ratio = Current Assets/Current Liabilities

3.5 = Current Assets/Current Liabilities

Working Capital = Rs. 1,00,000

• Current Liabilities :

Let,

Current Liabilities = x

Current Assets = 3.5x

Working Capital = Current Assets - Current Liabilities

⇒ 1,00,000 = 3.5x - x

⇒ 1,00,000 = 2.5x

⇒ x = 1,00,000 /2.5

⇒ x = 40,000

Current Liabilities = 40,000

• Current Assets :

⇒ Current Assets = 3.5x

⇒ Current Assets = 3.5 (40,000)

Current Assets = 1,40,000

• Value of Inventory :

• Liquid Ratio = 2.5 (Given)

Liquid Ratio = Liquid Assets/Current Liabilities

Current Liabilities = 40,000

⇒ Liquid Assets = 40,000 × 2.5

Liquid Assets = 1,00,000

Quick Assets = Current Assets -

Inventory

⇒ 1,00,000 = 1,40,000 - Inventory

⇒ Inventory = 1,40,000 - 1,00,000

⇒ Inventory = 40,000

Value of Inventory = 40,000

Therefore,

(i). Current Assets = 1,40,000

(ii). Current Liabilities = 40,000

(iii). Value of Inventory = 40,000

Answer 2

Given :-

(1) current ratio = 3.5

(2) liquid ratio = 2.5

(3)  working capital = Rs. 1,00,000​

To Find :-

(i)  current assets

(ii)  current liabilities

(iii) value of inventory

Solution :-

Let the liabilities be a

Then assests = 3.5 × a = 3.5a

Now, We know that

working capital = Current assests - Current liabilities

100000 = 3.5a - a

100000 = 2.5a

100000/2.5 = 2.5a/2.5

100000/25 × 10/1 = a

40,000 = a

Now

Assests = 3a = 1,40,000