#### Page No 4.103:

#### Question
21:

Moon Ltd. has a Current Ratio of 3.5 : 1 and Quick Ratio of 2 : 1. If the Inventories is ` 24,000; calculate total Current Liabilities and Current Assets.

#### Answer:

Current ratio= Current assets/Current liabilities=3.5/1

Quick ratio= Quick assets/Current liabilities=2/1

Let Current Liabilities be = *x*

Current Assets = 3.5 *x*

Quick Assets = 2 *x*

Stock = Current Assets − Quick Assets

24,000 = 3.5 *x* − 2 *x*

or, 24,000 = 1.5 *x*

*x* = 16,000

Current Liabilities = *x* = ` 16,000

Current Assets = 3.5 *x* = 3.5 × 16,000 = ` 56,000

#### Page No 4.103:

#### Question
22:

Umesh Ltd. has Current Ratio of 4.5 : 1 and a Quick Ratio of 3 : 1. If its inventory is ` 36,000, find out its total Current Assets and total Current Liabilities.

#### Answer:

Current ratio= Current assets/Current liabilities=4.5/1

Quick ratio= Quick assets/Current liabilities=3/1

Inventory = 36,000

Let Current Liabilities be = *x*

Current Assets = 4.5*x*

Quick Assets = 3*x*

Stock = Current Assets − Quick Assets

36,000 = 4.5*x* − 3*x*

*x* = 24,000

Current Assets = 4.5*x *= 4.5 × 24,000 = 1,08,000

Liquid Assets= 3*x *= 3 × 24,000 = 72,000

#### Page No 4.103:

#### Question
23:

Current Ratio 4; Liquid Ratio 2.5; Inventory ` 6,00,000. Calculate Current Liabilities, Current Assets and Liquid Assets.

#### Answer:

Current ratio= Current assets/Current liabilities=4/1

Liquid ratio= Liquid assets/Current liabilities=2.5/1

Inventory = 6,00,000

Let Current Liabilities be = *x*

Current Assets = 4*x*

Quick Assets = 2.5*x*

Stock = Current Assets − Quick Assets

6,00,000 = 4*x* − 2.5*x*

*x* = 4,00,000

Current Assets = 4*x *= 4 × 4,00,000 = 16,00,000

Liquid Assets = 2.5*x *= 2. 5× 4,00,000 = 10,00,000

#### Page No 4.103:

#### Question
24:

Current Liabilities of a company are `1,50,000. Its Current Ratio is 3 : 1 and Acid Test Ratio (Liquid Ratio) is 1 : 1. Calculate values of Current Assets, Liquid Assets and Inventory.

#### Answer:

Current ratio= Current assets/Current liabilities=3/1

Acid test ratio= Liquid assets/Current liabilities=1/1

Current Liabilities = 1,50,000

Current Assets = 3 × Current Liabilities

= 3 × 1,50,000 = 4,50,000

Liquid Assets = 1 × 1,50,000 = 1,50,000

Inventory = Current Assets − Liquid Assets

= 4,50,000 − 1,50,000 = 3,00,000

#### Page No 4.103:

#### Question
25:

Xolo Ltd.'s Liquidity Ratio is 2.5 : 1. Inventory is ` 6,00,000. Current Ratio is 4 : 1. Find out the Current Liabilities.

#### Answer:

Current ratio= Current assets/Current liabilities=4/1

Quick ratio= Quick assets/Current liabilities=2.5/1

Let the Current Liabilities be = *x*

Current Assets = 4*x*

Quick Assets = 2.5*x*

Stock = Current Assets − Quick Assets

6,00,000 = 4*x* − 2.5*x*

or, *x* = 4,00,000

Current Liabilities = *x* = ` 4,00,000

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## Chapter-4: Accounting Ratios | 2021-2022

**From Question No. 1 to 5**