Question

Find the current ratio of B limited data is as follows:

Land & Building: 15,00,000

Preliminary Expenses: 1,50,000

Cash: Rs.100,000

Accounts Receivables: Rs.900,000

Inventory: Rs.10,00,000

 

Bank Overdraft: Rs. 900,000

Trade Creditors: 180,000

Debentures: 12,00,000

A 2 Correct Answer Incorrect Answer
B 1.85 Correct Answer Incorrect Answer
C 2.8 Correct Answer Incorrect Answer
D 1.9 Correct Answer Incorrect Answer
E None of the above Correct Answer Incorrect Answer

Solution

Current Ratio (CR) = Current Assets/ Current Liabilities As such CR at present is = 20,00,000/1080000 = 1.85   Current Assets: Cash + Accounts Receivables + Inventory =100,000 + 900,000 + Rs.10,00,000 = Rs. 20,00,000   Current Liabilities: Bank Overdraft + Trade Creditors =Rs. 900,000 + 180,000 = Rs. 10,80,000

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