Question

If the current ratio is 2:1 and working capital is rs.60000, what is the value of the current assets ?

Answer 1

Given Current Ratio= 2:1

Working capital= 60000

We know that
Current Ratio = Current Assets/current liabilities

and

Working capital= Current Assets - current liabilities


Current Ratio
= current assets /current liabilities=2/1
=Current assets=(current liabilities)...let This be equation.....(1)

working capital
= Current Assets - current liabilities 60000
substituting information of equation (1)
=2current liabilities -current liabilities =60000
=current liabilities= 60000

Subsitute current liabilities=60000 in equation (1)
current assets= 2(current liabilities)
current assets= 2(60000)=120000


So The value of Current Assets is 120000

Answer 2

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