Question
16:
From the following information, calculate Liquid Ratio:
Particulars 
` 
Particulars 
` 

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

Inventories 
50,000 
Current
Liabilities 
70,000 

Prepaid
Expenses 
10,000 










Answer:
Quick
Assets or Liquid Assets = Currents Assets – Inventories – Prepaid Expenses
= ` 2,00,000 – ` 50,000 – ` 10,000 = ` 1,40,000
Current Liabilities = ` 70,000
Current ratio= liquid assets or quick assets/Current
liabilities=1,40,000/70,000=2:1
Question
17:
Quick Assets `3,00,000; Inventory (Stock) `80,000; Prepaid Expenses `20,000; Working Capital `2,40,000. Calculate Current Ratio.
Answer:
Current Assets= Quick Assets +Inventory (Stock) +Prepaid Expenses
Current Assets= 3,00,000+ 80,000+20,000
Current Assets= 4,00,000
Current Liabilities = Current Assets Working Capital
Current Liabilities = 4,00,000  2,40,000
Current Liabilities = 1,60,000
Current Ratio 
= 
Current Assets/ Current Liabilities 
Current Ratio 
= 
4,00,000/1,60,000 
Current Ratio 
= 
2.5 :1 
Question
18:
Current Assets `6,00,000; Inventories `1,20,000; Working Capital `5,04,000. Calculate Quick Ratio.
Answer:
Quick Assets 
= 
Current Assets + Inventories 

= 
6,00,000  1,20,000 
Quick Assets 
= 
4,80,000 
Current Liabilities 
= 
Current Assets Working Capital 

= 
6,00,0005,04,000 
Current Liabilities 
= 
96,000 
Quick Ratio 
= 
Quick
Assets/ Current Liabilities 

= 
4,80,000/96,000 

= 
5/1 = 5:1 
Question
19:
Current Liabilities of a company are ` 6,00,000. Its Current Ratio is 3 : 1 and Liquid Ratio is 1 : 1. Calculate value of Inventory
Answer:
Current ratio= Quick assets/Current liabilities=3/1
Acid test ratio= Liquied assets/Current liabilities=1/1
Current Liabilities = 6,00,000
Current Assets = 3 × Current Liabilities
= 3 × 6,00,000 = 18,00,000
Liquid Assets = 1 × 6,00,000 = 6,00,000
Inventory = Current Assets − Liquid Assets
= 18,00,000 − 6,00,000 = 12,00,000
Question
20:
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
Class : 12th  Ts Grewal solution 20222023
Volume 3  Chapter 4: Accounting Ratio
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