Question 1

Question 1 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 1 Chapter 4 of +2-B
Current Ratio and Quick Ratio
1. From the following, compute Current Ratio:

Amount
 
Amount

Trade Receivables (Sundry Debtors)
1,80,000
Bills Payable
20,000

Prepaid Expenses
40,000
Sundry Creditors
1,00,000

Cash and Cash Equivalents
50,000
Debentures 
4,00,000

Marketable Securities
50,000
Inventories 
80,000

Land and Building
5,00,000
Expenses Payable
80,000

Hint: Marketable Securities means the Short-term Investment.
The solution of Question 1 Cha

Question 2

Question 2 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 2 Chapter 4 of +2-B
Current Ratio and Quick Ratio
2. Calculate Current Ratio from the following information:

Amount
 
Amount

Total Assets
5,00,000
Non-current Liabilities
1,30,000

Fixed Tangible Assets
2,50,000
Non-current Investments
1,50,000

Shareholders' Funds
3,20,000

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

Total Assets
Fixed Tangible Assets + Non-Current Investments + Current Assets

Rs.5,00,000 =
Rs.2,50,000 + Rs.1,50,000 + Current Assets

Question 3

Question 3 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 3 Chapter 4 of +2-B
Current Ratio and Quick Ratio
3. Current Ratio is 2.5, Working Capital is Rs. 1,50,000. Calculate the number of Current Assets and Current Liabilities.
The solution of Question 3 Chapter 4 of +2-B: -

Current Ratio=
Current Assets

Current Liabilities

Current Ratio=

2.5

Current Liabilities= 
Trade Payables + Other Current Liabilities

=
Rs.90,000+ Rs.2,10,000 = Rs.3,00,000

Working Capital=
Current Assets - Current Liabilities

Question 4

Question 4 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 4 Chapter 4 of +2-B
Current Ratio and Quick Ratio
4. Working Capital is Rs. 9,00,000, Trade payables Rs. 90,000; and OtherCurrent Liabilities are Rs. 2,10,000. Calculate Current Ratio.
The solution of Question 4 Chapter 4 of +2-B: -

Working Capital= 
Rs.9,00,000

Current Liabilities =
Trade Payables + Other Current Liabilities

Rs.90,000+ Rs.2,10,000

=Rs.3,00,000

Working Capital
=Current Assets - Current Liabilities

Rs. 9,00,000=
Current Assets - Rs.

Question 5

Question 5 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 5 Chapter 4 of +2-B
Current Ratio and Quick Ratio
5. Working Capital Rs. 1,80,000; Total Debts Rs. 3,90,000; Long-term Debts Rs.3,00,000. Calculate Current Ratio.
Hint: 1. Current Liabilities = Total Debts-Long-term Debts.2. Current Assets = Working Capital + Current Liabilities.
 
The solution of Question 5 Chapter 4 of +2-B: -

Total Debts
=Rs. 3,90,000

Long-term Debts =
Rs. 3,00,000

Current Liabilities=
Total Debts – Long-term Debts

Rs. 3,90,000 – Rs. 3,00,000

Question 6

Question 6 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 6 Chapter 4 of +2-B
Current Ratio and Quick Ratio
6. Current Assets are Rs. 7,50,000, and Working Capital is Rs. 2,50,000.Calculate Current Ratio.
The solution of Question 6 Chapter 4 of +2-B: -

Current Assets
=Rs. 7,50,000

Working Capital=
Rs. 2,50,000

Working Capital=
Current Assets – Current Liabilities

Rs. 7,50,000 – Current Liabilities

Rs. 7,50,000 – Rs. 2,50,000

Current Liabilities =
Rs. 5,00,000

Current Ratio=
Current Assets

Current L

Question 7

Question 7 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 7 Chapter 4 of +2-B
Current Ratio and Quick Ratio
7. Trade Payable Rs. 7,50,000, Working Capital Rs. 9,00,000, Current LiabilitiesRs. 3,00,000. Calculate Current Ratio.Hint: Trade Payable are already included in Current Liabilities.
The solution of Question 7 Chapter 4 of +2-B: -

Trade Payable
=Rs. 50,000

Working Capital=
Rs. 9,00,000

Current Liabilities
=Rs. 3,00,000

Working Capital
=Current Assets – Current Liabilities

Current Assets=
Rs. 9,00,000 + 3,00,0

Question 8

Question 8 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 8 Chapter 4 of +2-B
Current Ratio and Quick Ratio
8. A company had Current Assets of Rs. 4,50,000 and Current Liabilities of Rs. 2,00,000. Afterwards, it purchased goods for Rs. 30,000 on Credit. CalculateRatio after the purchase.
The solution of Question 8 Chapter 4 of +2-B: - 
Purchase of Goods on Credit for Rs.30,000 will have two effects:(i) Increase Stock by Rs.30,000

Current Assets Rs.4,80,000
=Rs.4,50,000 + Rs.30,000

(ii) Increase Creditors by Rs.30,000;

Current Liabili

Question 9

Question 9 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 9 Chapter 4 of +2-B
Current Ratio and Quick Ratio
9. Current Liabilities of a company were Rs. 1,75,000 and its Current Ratio was 2:1. It paid Rs. 30,000 to a Creditor. Calculate Current Ratio after payment. Ratio after the purchase.
The solution of Question 9 Chapter 4 of +2-B: -

Current Ratio
=2: 1

Current Liabilities
=Rs. 1,75,000

Payment of Rs.30,000 to a Creditor will have two effects:
(i) Decrease in Cash by Rs.30,000

Current Assets=
Rs. 3,50,000 – Rs. 30,000

Question 10

Question 10 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 10 Chapter 4 of +2-B
Current Ratio and Quick Ratio
10. Ratio of Current Assets (Rs. 3,00,000) to Current Liabilities (Rs. 2,00,000) is 1.5 : 1. The accountant of the firm is interested in maintaining a CurrentThe ratio of 2: 1 by paying off a part of the Current Liabilities. Compute the amount of the Current Liabilities that should that the Current Ratio at the Level of  2:1 may be maintained.
The solution of Question 10 Chapter 4 of +2-B: -

Current Ratio
=
Current Assets
=
1.5

C

Question 11

Question 11 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 11 Chapter 4 of +2-B
Current Ratio and Quick Ratio
11. Ratio of Current Assets (Rs. 8,75,000) to Current Liabilities (Rs. 3,50,000) is 2.5 : 1. The firm wants to maintain a Current Ratio of 2: 1 by purchasinggoods on Credit. Compute the number of goods that should be purchased oncredit.
The solution of Question 11 Chapter 4 of +2-B: -

Current Liabilities
=Rs. 3,50,000

Current Assets
=Rs. 8,75,000

Current Ratio
=2.5: 1

The firm is interested to maintain the Current Ra

Question 12

Question 12 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 12 Chapter 4 of +2-B
Current Ratio and Quick Ratio
12. A firm had Current Assets of 5,00,000. It paid Current Liabilities of 1,00,000 and the Current ratio became 2: 1. Determine Current Liabilities and Working Capital before and after the payment was made.
The solution of Question 12 Chapter 4 of +2-B: -
The Firm paid off liabilities of Rs.1,00,000 which results in a decrease in current liabilities and current assets by the same amount.After making the payment:

Current Assets
=Rs.4

Question 13

Question 13 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 13 Chapter 4 of +2-B
Current Ratio and Quick Ratio
13. State giving reason, whether the current Ratio will improve or decline or will have no effect in each of the following transaction if Current Ratio is 2 : 1:

Cash paid to Trade Payables.
Bills Payable discharged.
Bills Receivable endorsed to creditors.
Payment of final Dividend already declared.
Purchase of Stock-in-Trade on credit.
Bills Receivable endorsed to creditors to a Credit dishonoured.
Purchase of Stock-in-Trade for cash

Question 14

Question 14 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 14 Chapter 4 of +2-B
Current Ratio and Quick Ratio
14. State giving reasons, which of the following transactions would improve,reduce or not change the Current Ratio, if Current Ratio of a company is (1 :1; or 0.8 : 1:

Cash paid to Trade Payables.
Purchase of Stock-in-Trade on credit.
Purchase of Stock-in-Trade for cash.
Payment of Dividend payable.
Bills Payable Discharged.
Bills Receivable endorsed to creditors.
Bills Receivable endorsed to a creditor dishonoured.

The solution of Q

Question 15

Question 15 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 15 Chapter 4 of +2-B
Current Ratio and Quick Ratio
15. From the following information, calculate Liquid Ratio:

Particular
Rs.
Particular
Rs.

Current Assets
2,00,000
Trade Receivables
1,10,000

Inventories
50,000
Current Liabilities
70,000

Prepaid Expenses
10,000

The solution of Question 15 Chapter 4 of +2-B: -

Quick Assets or Liquid Assets
=
Current Assets-Inventories - Prepaid Expenses

=
Rs.20,00,000 - Rs.50,000 - Rs.10,000

=
Rs.1,40,000

Quick Ratio o

Question 16

Question 16 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 16 Chapter 4 of +2-B
Current Ratio and Quick Ratio
16. Quick Assets Rs. 1,50,000; Inventories (Stock) 40,000; Prepaid Expenses Rs. 10,000; Working Capital Rs. 1,20,000.Calculate Current Ratio.
 
The solution of Question 16 Chapter 4 of +2-B: -

Quick Assets
=
Rs.1,50,000

Inventory
=
Rs.40,000

Prepaid Expenses
=
Rs.10,000

Current Assets
=
Quick Assets + Inventory + Prepaid Expenses

=
Rs.1,50,000 + Rs.40,000 + Rs.10,000

=
Rs.2,00,000

Working Capital
=
Current Asse

Question 17

Question 17 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 17 Chapter 4 of +2-B
Current Ratio and Quick Ratio
17. Current Assets Rs. 3,00,000; Inventories Rs. 60,000; Working Capital Rs.2,52,000. Calculate Quick Ratio.
 
The solution of Question 17 Chapter 4 of +2-B: -

Quick Assets
=
Rs.3,00,000

Inventory
=
Rs.60,000

Working Capital
=
Rs.2,52,000

Current Liabilities
=
Current Assets – Working Capital

=
Rs. 3,00,000 + Rs. 2,52,000

=
Rs.48,000

Quick Assets
=
Current Assets - Inventories

=
Rs.3,00,000 – Rs. 60,000

Q

Question 18

Question 18 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 18 Chapter 4 of +2-B
Current Ratio and Quick Ratio
18. Working Capital Rs. 3,60,000; Total Debts Rs. 7,80,000; Long-term Debts Rs.6,00,00; Inventories Rs. 1,80,000. Calculate Liquid Ratio.
 
The solution of Question 18 Chapter 4 of +2-B: -

Long-term Debts
=
Rs. 6,00,000

Total Debts
=
Rs. 7,80,000

Working Capital
=
Rs. 3,60,000

Inventories
=
Rs. 1,80,000

Current Liabilities
=
Total debts – Long-term Debts

=
Rs. 7,80,000 - Rs.6,00,000

=
Rs. 1,80,000

Current Ass

Question 19

Question 19 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 19 Chapter 4 of +2-B
Current Ratio and Quick Ratio
19. Current Liabilities of a Company are Rs. 6,00,000. Its Current Ratio is 3: 1 and Liquid is 1: 1. Calculate the value of Inventory.
 
The solution of Question 19 Chapter 4 of +2-B: -

Current Ratio
=
Current Assets
=
3

Current Liabilities
1

Liquid Ratio
=
Quick Assets
=
1

Current Liabilities
1

Current Liabilities
=
Rs. 6,00,000

Current Assets
=
3 x Current Liabilities

Current Assets
=
3 x Rs.6,00,000

Question 20

Question 20 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 20 Chapter 4 of +2-B
Current Ratio and Quick Ratio
20. X Ltd. has Current Ratio of a 3.5: 1 and Quick Raito of 2: 1. If theInventories are Rs. 24,000; calculate total Current Liabilities and CurrentAssets.
 
The solution of Question 20 Chapter 4 of +2-B: -

Current Ratio
=
Current Assets
=
3.5

Current Liabilities
1

Quick Ratio
=
Quick Assets
=
2

Current Liabilities
1

Let Current Liabilities
=
x

Current Assets
=
3.5x

Quick Assets
=
2x

Inventories
=
Current As

	Amount		Amount
Trade Receivables (Sundry Debtors)	1,80,000	Bills Payable	20,000
Prepaid Expenses	40,000	Sundry Creditors	1,00,000
Cash and Cash Equivalents	50,000	Debentures	4,00,000
Marketable Securities	50,000	Inventories	80,000
Land and Building	5,00,000	Expenses Payable	80,000

Current Ratio=	~~4,00,000~~
	~~2,00,000~~

T.S. Grewal 12 Class Book Keeping Part - B - T.S. Grewal - XII Solutions Chapter No. 4-Accounting Ratios

Quick Chapter Summary & Cheat Sheet

💡 Double Entry Accounting Principles

Topics & Questions Solved:

Question 1 Chapter 4 of +2-B - T.S. Grewal 12 Class

The solution of Question 1 Chapter 4 of +2-B: -

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

Question 2 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 3 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 4 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 5 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 6 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 7 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 8 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 9 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 10 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 11 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 12 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 13 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 14 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 15 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 16 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 17 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 18 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 19 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 20 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 21 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 22 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 23 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 24 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 25 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 26 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 27 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 28 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 29 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 30 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 31 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 32 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 33 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 34 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 35 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 36 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 37 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 38 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 39 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 40 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 41 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 42 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 43 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 44 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 45 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 46 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 47 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 48 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 49 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 50 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 51 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 52 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 53 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 54 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 55 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 56 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 57 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 58 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 59 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 60 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 61 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 62 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 63 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 64 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 65 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 66 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 67 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 68 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 69 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 70 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 71 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 72 Chapter 4 of +2-B - T.S. Grewal 12 Class