Q. 13 DK Goel Accounting Ratios Solutions Class 12 CBSE (2024-25)

the solutions of Question number 13 of Accounting Ratios chapter 5 of DK Goel Class 12 CBSE (2024-25)

Current Assets of a company were ₹ 7,20,000 and its Current ratio was 2.4 : 1. Afterwards, it made payment of ₹ 1,00,000 to its creditors. Calculate Current ratio after the payment.

[Ans. Current Ratio 3.1 : 1]

Solution:-

Calculation of Current Liabilities before Payment

$\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t}\mathbf{ }\mathbf{R}\mathbf{a}\mathbf{t}\mathbf{i}\mathbf{o} = \frac{\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t} \mathbf{A}\mathbf{s}\mathbf{s}\mathbf{e}\mathbf{t}\mathbf{s}}{\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t} \mathbf{L}\mathbf{i}\mathbf{a}\mathbf{b}\mathbf{i}\mathbf{l}\mathbf{i}\mathbf{t}\mathbf{i}\mathbf{e}\mathbf{s}}$

$\frac{\mathbf{2.4}}{\mathbf{1}} = \frac{\mathbf{7}\mathbf{,}\mathbf{20,000}}{\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t} \mathbf{L}\mathbf{i}\mathbf{a}\mathbf{b}\mathbf{i}\mathbf{l}\mathbf{i}\mathbf{t}\mathbf{i}\mathbf{e}\mathbf{s}}$

Current Liabilities = 7,20,000/2.4

Current Liabilities = ₹ 3,00,000

Calculation of Current Ratio after Payment of Current Liabilities

$\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t}\mathbf{ }\mathbf{R}\mathbf{a}\mathbf{t}\mathbf{i}\mathbf{o} = \frac{\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t} \mathbf{A}\mathbf{s}\mathbf{s}\mathbf{e}\mathbf{t}\mathbf{s}}{\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t} \mathbf{L}\mathbf{i}\mathbf{a}\mathbf{b}\mathbf{i}\mathbf{l}\mathbf{i}\mathbf{t}\mathbf{i}\mathbf{e}\mathbf{s}}$

$\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t} \mathbf{R}\mathbf{a}\mathbf{t}\mathbf{i}\mathbf{o} = \frac{\mathbf{7}\mathbf{,}\mathbf{20,000} \mathbf{–}\mathbf{ }\mathbf{1}\mathbf{,}\mathbf{00,000}\mathbf{ }\mathbf{\left(}\mathbf{C}\mathbf{a}\mathbf{s}\mathbf{h}\mathbf{\right)}}{\mathbf{3}\mathbf{,}\mathbf{00,000} \mathbf{–}\mathbf{ }\mathbf{1}\mathbf{,}\mathbf{00,000}\mathbf{ }\mathbf{\left(}\mathbf{L}\mathbf{i}\mathbf{a}\mathbf{b}\mathbf{i}\mathbf{l}\mathbf{i}\mathbf{t}\mathbf{i}\mathbf{e}\mathbf{s}\mathbf{\right)}}$

$\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t} \mathbf{R}\mathbf{a}\mathbf{t}\mathbf{i}\mathbf{o} = \frac{\mathbf{6}\mathbf{,}\mathbf{20,000}}{\mathbf{2}\mathbf{,}\mathbf{00,000}}$

Current Ratio = 3.1/1 = 3.1 : 1