Question

the current asset of a company are 6,00,000.its current ratio is 3:1 and quick ratio is 1:1 calculate the value of stock in trade​

Answer 1

Answer:

stock in trade = 4,00,000

Explanation:

current ratio = $\frac{current assets}{current liabilities}$

3 = $\frac{6,00,000}{current liabilities}$

current liabilities = 2,00,000

quick ratio = $\frac{quick assets}{current liabilities}$

1 = $\frac{quick assets}{2,00,000}$

quick assets = 2,00,000

quick assets = current assets - stock

2,00,000 = 6,00,000 - stock

stock = 4,00,000

Answer 2

Stock = 4,00,000

Explanation:

Given:

Current assets = 6,00,000

Current Ratio = 3:1

Quick ratio = 1:1

Stock = ?

Computation:

Current Ratio = Current assets / Current liabilities

3 = 6,00,000 / Current liabilities

Current liabilities = 6,00,000 / 3

Current liabilities = 2,00,000

Quick ratio = Current assets - Stock / Current liabilities

1 = (6,00,000 - Stock) / 2,00,000.

2,00,000 = 6,00,000 - Stock

Stock = 6,00,000 - 2,00,000

Stock = 4,00,000

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