Question

Given: Current Ratio = 2.8; Acid test Ratio = 1.5; Working capital = Rs. 1, 62,000
Calculate: Current Assets Current Liabilities

Answer 1

Answer:

I). Current Assets = Rs 2,52,000

II). Current Liabilities = Rs 90,000

Explanation:

Solution :

Working Capital = Rs 1,62,000 (Given)

Current Ratio = 2.8 (Given)

Acid-test Ratio = 1.5 (Given)

★ Current Ratio =

$\dfrac{Current \: Assets}{Current \: Liabilities}$

Let,

Current Liabilities be x

So,

Current Assets = 2.8x

Working Capital = Rs 1,62,000

Working Capital = Current Assets - Current Liabilities

$\longrightarrow$ 1,62,000 = 2.8x - x

$\longrightarrow$ 1,62,000 = 1.8x

$\longrightarrow$ x = 1,62,000 / 1.8

$\longrightarrow$ x = 90,000

Current Liabilities = Rs 90,000

• Current Assets = 2.8x

$\longrightarrow$ 2.8 × 90,000

$\longrightarrow$ 2,52,000

Current Assets = Rs 2,52,000

Therefore,

I). Current Assets = Rs 2,52,000

II). Current Liabilities = Rs 90,000