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Question 19 Chapter 4 of +2-B
I. Liquidity Ratios
19. (Maintaining Lower Current Ratio than Existing) The ratio of Current Assets (₹ 10,00,000) to Current Liabilities (₹ 4,00,000) is 2.5 : 1. The accountant of this firm is interested in maintaining a current ratio of 2 : 1 by acquiring some part of current assets on credit. You are required to suggest him the amount of current assets which must be acquired for this purpose.
| Current Ratio | = | 1.5 : 1 |
| Let assume Current Assets acquired | = | ₹ x |
| New Current Assets | = | ₹ 10,00,000 + x |
| New Current Liabilities | = | ₹ 4,00,000 + x |
| Current Liabilities | = | Current Assets |
| Current Liabilities |
| 2: 1 | = | ₹ 10,00,000 + x |
| ₹ 4,00,000 + x |
| ₹ 10,00,000 + x | = | (₹ 4,00,000 –x) x 2 |
| ₹ 10,00,000 + x | = | ₹ 8,00,000 + 2x |
| 2x - x | = | ₹ 10,00,000 – ₹ 8,00,000 |
| x | = | ₹ 2,00,000 |
| Current Assets | = | ₹ 2,00,000 |
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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.
This guide covers "Question 19 Chapter 4 of +2-B - USHA Publication 12 Class", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to USHA Publication Part 2 volume I.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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