Read the following information given in the financial statements of the company and answer the following question.

Calculate the current assets of the company.

₹7,20,000

The correct answer is option 2- ₹7,20,000.

Current assets = Marketable securities + trade receivables - Provision for doubtful debts + cash balance + inventories + income tax paid in advance
                        = 40,000 + 2,00,000 - 20,000 + 80,000 + 3,90,000 + 30,000
                        = ₹7,20,000

Note:

Under the Companies Act, 2013 (Schedule III) and Accounting Standard 13 (AS 13), "Trade Investments" are distinguished from "Marketable Securities" by their purpose and holding period. ICAI Guidance Note on Schedule III to the Companies Act, 2013 provide the following:

Trade Investments: These are investments made by a company in the shares or debentures of another company to promote its own trade or business (e.g., investing in a supplier or a distributor). Because these are strategic, they are intended to be held for the long term and are classified under Non-Current Assets.

Marketable Securities (Current Investments): These are held for a short duration (less than 12 months) to earn a return on surplus cash. They are classified as Current Assets.