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Current Ratio is 3.5 : 1. Working Capital is Rs 90,000. Calculate the amount of Current Assets and Current Liabilities.

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Current Ratio = \(\frac {\textit{Current Assets}}{\textit{Current Liabilities}} \)

Or, 3.5 = \(\frac {\textit{Current Assets}}{\textit{Current Liabilities}} \)

or, Current Assets = 3.5 Current Liabilities (1)

Working Capital = Current Assets – Current

Liabilities Working Capital = 90,000

or, Current Assets – Current Liabilities = 90,000

or, 3.5 = Current Liabilities – Current Liabilities = 90,000 (from I)

or, 2.5 Current Liabilities = \(\frac{90,000}{2.5}\) = 36,000

or Current Assets = 3.5 Current Liabilities 

= 3.5 × 36,000 = 1,26,000.

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