Q. 14 DK Goel Accounting Ratios Solutions Class 12 CBSE (2024-25)

the solutions of Question number 14 of Accounting Ratios chapter 5 of DK Goel Class 12 CBSE (2024-25)

Current Liabilities of a company were ₹ 1,50,000 and its current ratio was 2.2 : 1. Afterwards it purchased goods on credit for ₹ 50,000. Calculate the current ratio after the purchase of goods.

[Ans. Current Ratio 1.9 : 1.]

Solution:-

Calculation of Current Assets before purchase of goods on credit

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

$\frac{\mathbf{2.2}}{\mathbf{1}} = \frac{\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t} \mathbf{A}\mathbf{s}\mathbf{s}\mathbf{e}\mathbf{t}\mathbf{s}}{\mathbf{1}\mathbf{,}\mathbf{50,000}}$

Current Assets = 1,50,000 x 2.2

Current Assets = ₹ 3,30,000

Calculation of the Current ratio after the purchase of Goods on Credit

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

$\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t}\mathbf{ }\mathbf{R}\mathbf{a}\mathbf{t}\mathbf{i}\mathbf{o}\mathbf{ }\mathbf{=} \frac{\mathbf{3}\mathbf{,}\mathbf{30,000} \mathbf{+}\mathbf{ }\mathbf{50,000}\mathbf{ }\mathbf{(}\mathbf{I}\mathbf{n}\mathbf{v}\mathbf{e}\mathbf{n}\mathbf{t}\mathbf{o}\mathbf{r}\mathbf{y}}{\mathbf{1}\mathbf{,}\mathbf{50,000} \mathbf{+}\mathbf{ }\mathbf{50,000}\mathbf{ }\mathbf{\left(}\mathbf{C}\mathbf{r}\mathbf{e}\mathbf{d}\mathbf{i}\mathbf{t}\mathbf{o}\mathbf{r}\mathbf{\right)}}$

$\mathbf{C}\mathbf{u}\mathbf{r}\mathbf{r}\mathbf{e}\mathbf{n}\mathbf{t}\mathbf{ }\mathbf{R}\mathbf{a}\mathbf{t}\mathbf{i}\mathbf{o}\mathbf{ }\mathbf{=} \frac{\mathbf{3}\mathbf{,}\mathbf{80,000} }{\mathbf{2}\mathbf{,}\mathbf{00,000}}$

Current Ratio = 1.9/1 = 1.9 : 1