Question 10 Chapter 4 of +2-B – USHA Publication 12 Class

Question 10 Chapter 4 of +2-B

Question 10 Chapter 4 of +2-B

I. Liquidity Ratios

10. (Current Ratio & Quick Ratio ) From the following, compute the current ratio and quick ratio.
Trade receivable ₹ 2,00,000 ; Prepaid expenses ₹ 20,000 ; Cash ₹ 60,000 ; Marketable securities ₹ 40,000 ; Machinery ₹ 10,000 ; Expenses payable ₹ 80,000 ; Trade payable ₹ 1,20,000 ; Debentures ₹ 4,00,000 ; Inventories ₹ 80,000.

The solution of Question 10 Chapter 4 of +2-B: – 

 

Current Assets = Trade receivables + Prepaid expenses + Cash + Marketable Securities + Stock
  = ₹ 2,00,000 + ₹ 20,000 + ₹ 60,000 + ₹ 40,000 + ₹80,000
Current Assets = ₹ 4,00,000

 

Current Liabilities = Trade payable + Expenses payable
  = ₹ 1,20,000 + ₹ 80,000
Current Liabilities = ₹ 2,00,000

 

Current Ratio= Current Assets
Current Liabilities

 

Current Ratio = ₹ 4,00,000
₹ 2,00,000
     
  = 2 : 1

 

Quick Assets = Current Assets – (Prepaid expenses + Stock)
  = ₹ 4,00,000 – (₹ 20,000 + ₹80,000)
Quick Assets = ₹ 3,00,000
Current Liabilities = ₹ 2,00,000
Quick Ratio = Quick Assets
Current Liabilities
     
  = ₹ 3,00,000
₹ 2,00,000
     
Quick Ratio = 1.5: 1

 

What are Liquidity Ratios – Formulas and Examples

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Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

  • Chapter No. 1 – Accounting Not for Profit Organisations

  • Chapter No. 2 – Partnership Accounts – I

  • Chapter No. 3 – Partnership Accounts – II (Introduction)

  • Chapter No. 4 – Partnership Accounts – III (Goodwill: Nature and Valuation)

  • Chapter No. 5 – Partnership Accounts – IV (Reconstitution of Partnership)

  • Chapter No. 6 – Partnership Accounts – V (Admission of A Partner)

  • Chapter No. 7 – Partnership Accounts – VI (Retirement and Death of A Partner)

  • Chapter No. 8 – Company Accounts (Share Capital)

  • Chapter No. 9 – Company Accounts (Issue of Debentures)

  • Chapter No. 10 – Company Accounts (Redemption of Debentures

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

  • Chapter No. 1 – Financial Statements of a Company (Balance Sheet Only)

  • Chapter No. 2 – Techniques of Financial Statement Analysis

  • Chapter No. 3 – Ratio Analysis 

  • Chapter No. 4 – Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 3 min 225x300 - Question 10 Chapter 4 of +2-B  - USHA Publication  12 Class
T.S. Grewal’s Analysis of Financial Statements

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