(i) Current Ratio = 2.5
(ii) Working Capital = * 90,000.
Find out : (a) Current Assets, and (b) Current Liabilities.
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Current ratio = current assets /current liabilities
2.5=C.A/C.L
C.A=2.5*C.L. (Equation 1)
Working capital = current assets-current liabilities
90,000=C.A-C.L. (Equation 2)
Put equation 1 in equation 2:
90,000=2.5 *C.L-C.L
90,000=1.5 *C.L
C.L=90,000/1.5=60,000
C.A=2.5 *C.L
C.A=2.5*60,000 =1,50,000
Current assets = 1,50,000
Current liability =60,000
2.5=C.A/C.L
C.A=2.5*C.L. (Equation 1)
Working capital = current assets-current liabilities
90,000=C.A-C.L. (Equation 2)
Put equation 1 in equation 2:
90,000=2.5 *C.L-C.L
90,000=1.5 *C.L
C.L=90,000/1.5=60,000
C.A=2.5 *C.L
C.A=2.5*60,000 =1,50,000
Current assets = 1,50,000
Current liability =60,000
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