Accountancy

The Quick Ratio of a company is 0.8: 1. State with reason, whether the following transactions will increase, decrease or not change the Quick Ratio: (i) Purchase of loose tools for Rs. 2,000; (ii) Insurance premium paid in advance Rs. 500; (iii) Sale of goods on credit Rs. 3,000; (iv) Honored a bills payable of Rs. 5,000 on maturity.

SOLUTION

Continue ReadingThe Quick Ratio of a company is 0.8: 1. State with reason, whether the following transactions will increase, decrease or not change the Quick Ratio: (i) Purchase of loose tools for Rs. 2,000; (ii) Insurance premium paid in advance Rs. 500; (iii) Sale of goods on credit Rs. 3,000; (iv) Honored a bills payable of Rs. 5,000 on maturity.

Quick Ratio of a company is 2: 1. State giving reasons, which of the following transactions would (i) improve, (ii) reduce, (iii) Not change the Quick Ratio: (a) Purchase of goods for cash; (b) Purchase of goods on credit; (c) Sale of goods (costing Rs. 10,000) for Rs. 10,000; (d) Sale of goods (costing Rs. 10,000) for Rs. 11,000; (e) Cash received from Trade Receivables.

SOLUTION Quick Ratio = 2: 1Let Quick Assets be = Rs. 20,000Current Liabilities = Rs. 10,000 (a) Purchase of goods for Cash- ReduceReason: This transaction will result decrease in cash and increases in stock. Liquid Asset will…

Continue ReadingQuick Ratio of a company is 2: 1. State giving reasons, which of the following transactions would (i) improve, (ii) reduce, (iii) Not change the Quick Ratio: (a) Purchase of goods for cash; (b) Purchase of goods on credit; (c) Sale of goods (costing Rs. 10,000) for Rs. 10,000; (d) Sale of goods (costing Rs. 10,000) for Rs. 11,000; (e) Cash received from Trade Receivables.

Current Assets of a company is are Rs. 5,00,000. Its Current Ratio is 2.5 : 1 and Quick Ratio is 1: 1. Calculate value of Current Liabilities, Liquid Assets and Inventory.

SOLUTION Current ratio = Current assets / Current liabilities = 2.5 / 1Quick ratio = Liquid assets / Current liabilities = 1 / 1 Current Assets = 5,00,000Current ratio = Current assets…

Continue ReadingCurrent Assets of a company is are Rs. 5,00,000. Its Current Ratio is 2.5 : 1 and Quick Ratio is 1: 1. Calculate value of Current Liabilities, Liquid Assets and Inventory.

A Ltd.’s Liquidity Ratio is 2.5: 1. Inventory is Rs. 6,00,000. Current Ratio is 4: 1. Find out the Current Liabilities.

SOLUTION Current ratio = Current assets / Current liabilities= 4 / 1Quick ratio = Quick assets / Current liabilities= 2.5 / 1 Let the Current Liabilities be = xCurrent Assets =…

Continue ReadingA Ltd.’s Liquidity Ratio is 2.5: 1. Inventory is Rs. 6,00,000. Current Ratio is 4: 1. Find out the Current Liabilities.

Current Liabilities of a company are Rs. 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.

SOLUTION Current ratio = Current assets / Current liabilities = 3 / 1Acid test ratio = Liquid assets / Current liabilities = 1 / 1 Current Liabilities = 1,50,000Current Assets = 3…

Continue ReadingCurrent Liabilities of a company are Rs. 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.

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

SOLUTION Current ratio = Current assets / Current liabilities=4 / 1Liquid ratio = Liquid assets / Current liabilities= 2.5 / 1 Inventory = 6,00,000Let Current Liabilities be = xCurrent Assets =…

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

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

SOLUTION Current ratio = Current assets / Current liabilities= 4.5 / 1 Quick ratio = Quick assets / Current liabilities = 3 / 1 Inventory = 36,000Let Current Liabilities be = xCurrent Assets…

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

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

SOLUTION Current ratio = Current assets / Current liabilities= 3.5 / 1Quick ratio = Quick assets / Current liabilities= 2 / 1 Let Current Liabilities be = xCurrent Assets = 3.5 xQuick…

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

Current Liabilities of a company are Rs. 6,00,000. Its Current Ratio is 3: 1 and Liquid Ratio is 1: 1. Calculate value of Inventory

SOLUTION Current ratio = Quick assets / Current liabilities= 3 / 1Acid test ratio = Liquid assets / Current liabilities= 1 / 1 Current Liabilities = 6,00,000Current Assets = 3…

Continue ReadingCurrent Liabilities of a company are Rs. 6,00,000. Its Current Ratio is 3: 1 and Liquid Ratio is 1: 1. Calculate value of Inventory