Question 18 Chapter 4 of +2-B
Table of Contents
Current Ratio and Quick Ratio
18. Working Capital Rs. 3,60,000; Total Debts Rs. 7,80,000; Long-term Debts Rs.6,00,00; Inventories Rs. 1,80,000. Calculate Liquid Ratio.
The solution of Question 18 Chapter 4 of +2-B: –
| Long-term Debts | = | Rs. 6,00,000 |
| Total Debts | = | Rs. 7,80,000 |
| Working Capital | = | Rs. 3,60,000 |
| Inventories | = | Rs. 1,80,000 |
| Current Liabilities | = | Total debts – Long-term Debts |
| = | Rs. 7,80,000 – Rs.6,00,000 | |
| = | Rs. 1,80,000 |
| Current Assets | = | Current Liabilities + Working Capital |
| = | Rs. 1,80,000 + Rs. 3,60,000 | |
| Current Assets | = | Rs. 5,40,000 |
| Quick Assets | = | Current Assets – Inventories |
| = | Rs. 5,40,000 – Rs. 1,80,000 | |
| Current Assets | = | Rs. 3,60,000 |
| Current Ratio | = | Quick Assets |
| Current Liabilities |
| = | Rs.3,60,000 | |
| Rs.1,80,000 |
Current Ratio= 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
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