Question 21 Chapter 4 of +2-B – USHA Publication 12 Class

Question 21 Chapter 4 of +2-B

Question 21 Chapter 4 of +2-B

I. Liquidity Ratios

21. (Current Assets & Working Capital after & before the Acquisition of Stock) A firm had current liabilities of ₹ 1,25,000. It then acquired stock in trade at a cost of ₹ 25,000 on credit. After this acquisition, the current ratio 2 : 1. Determine the size of current assets and working capital after and before the inventories was acquired.

The solution of Question 21 Chapter 4 of +2-B: – 

Current Liabilities before purchasing of stock on credit=₹ 1,25,000
Stock purchase on credit=₹ 25,000
Current Liabilities after the purchase of stock on credit=₹ 1,50,000
Current Ratio after the purchase of stock=2: 1
If Current Liabilities=₹ 1,50,000 or 1
Current Assets=₹ 1,50,000 x 2
 =₹ 3,00,000
Current Assets before Purchase of stock=₹ 3,00,000 – ₹ 25,000
 =₹ 2,75,000

Working Capital

Before Purchase of stock

Working Capital=Current Assets – Current Liability
 =₹ 2,75,000 – ₹ 1,25,000
 =₹ 1,50,000

 

After Purchase of stock

Working Capital=Current Assets – Current Liability
 =₹ 2,75,000 – ₹ 1,25,000
 =₹ 1,50,000



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

Leave a Reply