Target Exam

CUET

Subject

-- Accountancy Part B

Chapter

Accounting Ratios

Question:

Read the following information and answer the question.

PARTICULARS AMOUNT ( ₹)
Cost of revenue from operations 18,00,000
Inventory 3,60,000
Trade receivables 1,70,000
Marketable securities 50,000
Cash and bank balance 20,000
Trade payables 1,40,000
Provision for tax 10,000

Calculate working capital.

Options:

₹3,00,000

₹3,50,000

₹4,00,000

₹4,50,000

Correct Answer:

₹4,50,000

Explanation:

The correct answer is option 4- ₹4,50,000.

Current liabilities = Trade payables + Provision for tax
                           = 1,40,000 + 10,000
                           = ₹1,50,000

Current assets = Inventory + trade receivables + marketable securities + cash and bank balance
                        = 3,60,000 + 1,70,000 + 50,000 + 20,000
                        = ₹6,00,000

Working capital = current asset - current liabilities
                           = 6,00,000 - 1,50,000
                           = ₹4,50,000