Question

If the current ratio is 2 : 1 and working capital is rs. 60,000, what is the value of the current assets?

Answer 1

it is little bit different from the question which I had done in notebook

Answer 2

Answer:

The Value of Current Assets is Rs. 1,20,000

Explanation:

Solution :

Current ratio= 2:1

Current ratio = $\frac{Current \: Assets}{Current \: Liabilities} = \frac{2}{1}$

Let,

Current Liabilities = x

Current Assets = 2x

Working capital = Rs. 60,000

Working capital = Current Assets - Current Liabilities

60,000 = 2x - x

60,000 = x

x = 60,000

Current Liabilities = Rs. 60,000

Current Assets = 2x

2 × 60,000

1,20,000

Current Assets = Rs. 1,20,000

Hence, the Value of Current Assets is Rs. 1,20,000