Question 11 Chapter 4 of +2-B
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Video Tag:Current Ratio and Quick Ratio
11. Ratio of Current Assets (Rs. 8,75,000) to Current Liabilities (Rs. 3,50,000) is 2.5 : 1. The firm wants to maintain a Current Ratio of 2: 1 by purchasing
goods on Credit. Compute the number of goods that should be purchased on
credit.
The solution of Question 11 Chapter 4 of +2-B: –
Current Liabilities | =Rs. 3,50,000 |
Current Assets | =Rs. 8,75,000 |
Current Ratio | =2.5: 1 |
The firm is interested to maintain the Current Ratio 2: 1 by Purchasing goods on credit.
∴ Let the number of goods purchased on credit be = x
Current Liabilities | =Rs. 3,50,000 + x |
Current Assets | =Rs. 8,75,000 + x |
Current Ratio | = | Current Assets | = | Rs. 8,75,000 | = | 2 |
Current Liabilities | Rs. 3,50,000 | 1 |
Rs. 8,75,000 + x | Rs. 7,00,000 + 2x |
Rs. 8,75,000 – Rs. 7,00,000 2x-x
Rs. 1,75,000 x
Therefore, goods worth Rs.1,75,000 must be purchased on credit to maintain the current ratio at 2:1
Balance Sheet: Meaning, Format & Examples
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Also, Check out the solved question of previous Chapters: –
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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