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.
The solution of Question 19 Chapter 4 of +2-B: –
| 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 |
What are Liquidity Ratios – Formulas and Examples
Comment if you have any question.
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 (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- 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
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
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