A Company's Current Ratio is 3 : 1; Current Liabilities are Rs2,50,000; Inventory is Rs60,000 and Prepaid Expenses are Rs5,000. Its Liquid Assets will be........
Answer & explanation
Correct answer: option 3
Current Ratio= Current Assets/Current Liabilities
3/1=Current Assets/ 2,50,000
Current Assets=7,50,000
Liquid Assets= Current Assets-Inventory-Prepaid Expenses
= 7,50,000-60,000-5,000
= 6,85,000