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Question 18 Chapter 14 of Class 12 Part – 2 – 2024
I. Liquidity Ratios
18. (Maintaining between Current Ratio) The ratio of Current Assets (₹ 6,00,000) to Current
Liabilities is 1.5: 1. The accountant of this firm is interested in maintaining a current ratio of 2: 1 by paying some part of the Current Liabilities. You are required to suggest to him the number of current liabilities which must be paid for this purpose.
| Current Assets | = | ₹ 6,00,000 |
| = | 1.5 : 1 |
| Current Liabilities | = | ₹ 6,00,000 | X | 1 |
| 1.5 |
| Let assume Current Liabilities paid | = | ₹ x |
| New Current Assets | = | ₹ 6,00,000 - x |
| New Current Liabilities | = | ₹ 4,00,000 - x |
| New Current Ratio | = | Current Assets |
| Current Liabilities |
| 2 : 1 | = | ₹ 6,00,000 - x |
| ₹ 4,00,000 - x | ||
| ₹ 6,00,000 - x | = | (₹ 4,00,000 –x) x 2 |
| ₹ 6,00,000 - x | = | ₹ 8,00,000 – 2x |
| 2x - x | = | ₹ 8,00,000 – ₹ 6,00,000 |
| x | = | ₹ 2,00,000 |
| Current Liabilities | = | ₹ 2,00,000 |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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