Multiple Choice Questions on A Company rsquo s Current Ratio is 3 1 Current Liabilities are Rs2 50 000 Inventory is Rs60 000 and ........... for Commerce 12th Preparation

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Multiple Choice Questions

A Company rsquo s Current Ratio is 3 1 Current Liabilities are Rs2 50 000 Inventory is Rs60 000 and ...........

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    A Company’s Current Ratio is 3 : 1; Current Liabilities are Rs2,50,000; Inventory is Rs60,000 and Prepaid Expenses are Rs5,000. Its Liquid Assets will be :

    Rs6,90,000

    Incorrect Answer

    Rs6,95,000

    Incorrect Answer

    Rs6,85,000

    Correct Answer

    Rs8,15,000

    Incorrect Answer
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    Explanation:

    - The Current Ratio of 3:1 implies current assets are three times the current liabilities. So, current assets are 3 x Rs 2,50,000 = Rs 7,50,000.

    - Liquid assets are calculated as current assets minus inventory and prepaid expenses.

    - Inventory is Rs 60,000 and prepaid expenses are Rs 5,000.

    - Liquid Assets = Current Assets - Inventory - Prepaid Expenses = Rs 7,50,000 - Rs 60,000 - Rs 5,000 = Rs 6,85,000.

    Correct Answer: Rs 6,85,000

    By: santosh
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