Question

Illustration 8. Given :
Current Ratio = 2.8
Acid-test Ratio 1.5
Working Capital = * 1,62,000
Find out :
(a) Current Assets
(b) Current Liabilities
(c) Liquid Assets.​

Answer 1

Answer:

option c is correct answer

Answer 2

(a) Current Assets = Rs 2,52,000

(b) Current Liabilities = Rs 90,000

(c) Liquid Assets = Rs 1,35,000

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

Acid -Test Ratio = 1.5

Acid -Test Ratio = $\dfrac{Liquid \: Assets}{Current \: Liabilities}$

Current Liabilities = Rs 90,000

Liquid Assets = 90,000 × 1.5

$\longrightarrow$ 1,35,000

Liquid Assets = Rs 1,35,000

Therefore,

(a) Current Assets = Rs 2,52,000

(b) Current Liabilities = Rs 90,000

(c) Liquid Assets = Rs 1,35,000