Question 21 Chapter 4 of +2-B
Table of Contents
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
- 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
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
