Question 19 Chapter 4 of +2-B – USHA Publication 12 Class

Question 19 Chapter 4 of +2-B

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

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

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

2 Book 3 min 225x300 - Question 19 Chapter 4 of +2-B  - USHA Publication  12 Class
T.S. Grewal’s Analysis of Financial Statements

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