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Question 20 Chapter 4 of +2-B
I. Liquidity Ratios
20. A firm had current assets of ₹ 2,00,000. It then paid a current liability of ₹ 50,000. After this payment the current ratio was 2 : 1. Determine the size of current liabilities and working capital after and before the payment was made.
| Current Assets before payment | = | ₹ 2,00,000 |
| Current Liabilities paid | = | ₹ 50,000 |
| Current Assets after payment of Current Liabilities | = | ₹ 1,50,000 |
| Current Ratio after payment current liabilities | = | 2 : 1 |
| Current Assets | = | 1,50,000 or 2 |
| Current Liabilities | = | ₹ 1,50,000 |
| 2 |
| Current Liabilities | = | ₹ 75,000 |
| = | ₹ 75,000 + ₹ 50,000 | |
| Current Liabilities before payment | = | ₹ 1,25,000 |
Working Capital
Before payment of Current Liabilities
| Working Capital | = | Current Assets – Current Liability |
| = | ₹ 2,00,000 - ₹ 1,25,000 | |
| = | ₹ 75,000 |
After payment of Current Liabilities
| Working Capital | = | Current Assets – Current Liability |
| = | ₹ 1,50,000 - ₹ 75,000 | |
| = | ₹ 75,000 |
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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 20 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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