Question 20 Chapter 4 of +2-B – USHA Publication 12 Class

Question 20 Chapter 4 of +2-B

Question 20 Chapter 4 of +2-B

I. Liquidity Ratios

20. A firm had current assets of ₹ 2,00,000. It then paid a current liability of ₹ 50,000. After this payment the current ratio was 2 : 1. Determine the size of current liabilities and working capital after and before the payment was made.

The solution of Question 20 Chapter 4 of +2-B: – 

Current Assets before payment = ₹ 2,00,000
Current Liabilities paid = ₹ 50,000
Current Assets after payment of Current Liabilities = ₹ 1,50,000
Current Ratio after payment current liabilities = 2 : 1
Current Assets = 1,50,000 or 2
Current Liabilities = ₹ 1,50,000
2
Current Liabilities = ₹ 75,000
  = ₹ 75,000 + ₹ 50,000
Current Liabilities before payment = ₹ 1,25,000

Working Capital

Before payment of Current Liabilities

Working Capital = Current Assets – Current Liability
  = ₹ 2,00,000 – ₹ 1,25,000
  = ₹ 75,000

After payment of Current Liabilities

Working Capital = Current Assets – Current Liability
  = ₹ 1,50,000 – ₹ 75,000
  = ₹ 75,000

 

 

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 20 Chapter 4 of +2-B  - USHA Publication  12 Class
T.S. Grewal’s Analysis of Financial Statements

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