Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

Calculate working capital from the following information-

PARTICULARS AMOUNT ( ₹)
Cost of revenue from operations  1800000
Inventory 360000
Trade receivables 170000
Marketable securities 50000
Cash and bank balance 20000
Trade payables 140000
Provision for tax 10000
Options:

₹300000

₹350000

₹400000

₹450000

Correct Answer:

₹450000

Explanation:

Working capital = current asset - current liabilities
                       = 600000 - 150000
                       = ₹450000

*Current liabilities = Trade payables + Provision for tax
                          = 140000 + 10000
                          = ₹150000

*Current assets= Inventory + trade receivables + marketable securities + cash and bank balance
                     = 360000 + 170000 +50000 + 20000
                      = ₹600000