LIVE Course for free

Rated by 1 million+ students
Get app now
0 votes
1.5k views
in Accounts by (64.6k points)

Shine Limited has current 1 and quick ratio 3 : 1; if the inventor is 36,000, calculate Current Liabilities, and Current Assets.

1 Answer

+1 vote
by (59.7k points)
selected by
 
Best answer

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

or \(\frac{4.5}{1}\) = \(\frac {\textit{Current assets}}{\textit{Current Liabilities}} \)

or, 4.5 Current Liabilities = Current Assets

Quick Ratio = \(\frac {\textit{Quick assets}}{\textit{Current Liabilities}} \)

or, 3 Current Liabilities = Quick Assets

Quick Assets = Current Assets – Stock

= Current Assets – 36,000

or, 4.5 Current Liabilities – 3 Current Liabilities 

= 36,000

or, 1.5 Current Liabilities = 36,000 or, Current Liabilities 

= 24,000

Current Assets = 4.5 current Liabilities 

or, Current Assets = 4.5 × 24,000 

= 1,08,000.

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.

Categories

...