Current Ratio 2 8 1 Liquid Ratio 1 5 1 Working Capital Rs 90 000 Current Assets Current Liabilities ...........

Costing - Phase (I & II) Methods of Costing

Current Ratio: 2.8:1

Liquid Ratio:1.5 :1

Working Capital: Rs. 90,000/-

Current Assets, Current Liabilities and Inventory will be:

Rs.1,50,000/-; Rs. 60,000/-; Rs. 60,000/-

Rs.1,40,000/-; Rs. 50,000/-; Rs. 65,000/-

Rs.1,30,000/-; Rs. 50,000/-; Rs. 60,000/-

None of the above

Working capital= Current Assets – Current liabilities

Let current liabilities be ‘’ a ‘’, so current assets will be 2.8 a

90,000= 2.8 a – a

90000= 1.8 a

a= 90,000/1.8

a= Rs. 50,000/-

so, current liabilities are Rs. 50,000

Current assets= Rs. 50,000 x 2.8 = Rs. 140,000/-

Liquid assets = Rs. 50,000 x 1.5 = Rs. 75,000

Inventory = Current Assets – Liquid Assets

Inventory will be Rs. 65,000/-

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