Question

If the current assets and current liabilities are Rs 2,000 lakh and Rs 1,200 lakh respectively. How much amount can be borrowed on a short term basis without reducing current ratio below 1.5?
a) Rs 400 lakh
b) Rs 1,000 lakh
c) Rs 1,200 lakh
d) Rs 1,400 lakh

Answer 1

Answer:

current ratio =current asset / current liabilities

1.5=x/1200

x=1800

current asset should be 1800

Amount that can be withdrawn =2000-1800=200

so here all the options are wrong

Answer 2

Answer:

The correct answer is option B

Explanation:

Current Ratio = Current Assets (C.A)/ Current Liabilities (C.L)  = 2.5

So, CA= 2.5 CL

Now, Working Capital = Current Assets(C.A) minus Current Liabilities (C.L) = Rs.60000

So, C.A - C.L = 60000

      2.5 C.L-CL = 60000

       C.L = Rs.40000

Now, C.A = 2.5 x 40000 = Rs.100000

Reference Link

• https://brainly.in/question/18934187