X Ltd. has a Current Ratio of 3.5:1 and a Quick Ratio of 2: 1. If the excess of current assets over quick assets represented by inventories is ₹24,000. Calculate current liabilities.
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹16,000.
Current ratio = Current assets / Current liabilities
= 3.5/1
Quick ratio = Quick assets / Current liabilities
= 2/1
Let Us assume assets as x
Current assets - Quick assets = Inventories
3.5x - 2x = 24,000
1.5x = 24,000
x = 24,000 X 10/15
= 16,000
So current assets = 16,000 X 3.5
= ₹56,000
Current ratio = Current assets / Current liabilities
= 3.5/1
3.5/1 = 56,000/ CL
CL = 56,000/3.5
= 16,000
Thus, current liabilities are 16,000.