Inventory Rs 80 000 Prepaid expenses Rs 2 000 Quick Ratio 2 5 1 Current Liabilities Rs 50 000 C...........

Costing - Phase (I & II) Methods of Costing

Inventory: Rs. 80,000/-

Prepaid expenses: Rs. 2,000/-

Quick Ratio: 2.5:1

Current Liabilities: Rs. 50,000/-

Current Ratio will be:

5.14:1

6.14:1

4.14:1

Cannot be calculated

Quick Ratio= liquid assets/current liabilities

2.5= liquid assets/50,000

Liquid assets= 50,000 x 2.5= Rs. 1,25,000/-

Current assets= liquid assets + inventory + prepaid Expenses

= 1,25,000 + 80,000 + 2000= Rs. 2,07,000

Current Ratio= Current Assets/Current Liabilities

2.07,000/50,000=4.14:1

Submit Error