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Get complete step-by-step solutions for T.S. Grewal ISC Class 12 Accountancy Volume 2 - Chapter 5 - Ratio Analysis. Study double-entry system details, practice timed problems, and verify answers directly.
From the following data, compute Current Ratio:
| Particulars | ₹ |
|---|---|
| Trade Payables | 1,75,000 |
| Advance Tax | 10,000 |
| Short-term Borrowings | 25,000 |
| Accrued Income | 5,000 |
| Other Current Liabilities | 50,000 |
| Short-term Provisions | 3,00,000 |
| Prepaid Expenses | 12,500 |
| Inventories | 2,37,500 |
| Trade Receivables | 8,50,000 |
| Current Investments | 25,000 |
| Provision for Doubtful Debts | 75,000 |
| Cash & Bank Balances | 25,000 |
| Short-term Loans & Advances | 10,000 |
Note: Advance Tax and Accrued Income are current assets, not liabilities; the Provision for Doubtful Debts is deducted from Trade Receivables, not added to Current Assets separately.
| Item | Working | Amount (₹) |
|---|---|---|
| Current Assets: Inventories + Trade Receivables (8,50,000 − 75,000) + Current Investments + Accrued Income + Short-term Loans & Advances + Prepaid Expenses + Advance Tax | 2,37,500 + 7,75,000 + 25,000 + 5,000 + 10,000 + 12,500 + 10,000 | 10,72,500 |
| Current Liabilities: Trade Payables + Short-term Borrowings + Other Current Liabilities + Short-term Provisions | 1,75,000 + 25,000 + 50,000 + 3,00,000 | 5,50,000 |
Answer: Current Ratio = 1072500 / 550000 = 1.95 : 1.
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