Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

Read the following information and answer the following questions.

Net profit after tax = ₹6,50,000
12.5% debentures = ₹8,00,000
Income tax = 50%
Fixed assets at cost = ₹24,60,000
Depreciation reserve = ₹4,60,000
Current assets = ₹15,00,000
Current liabilities = ₹7,00,000
Capital employed = ₹28,00,000

Calculate working capital of the company?

Options:

₹2,50,000

₹6,50,000

₹9,60,000

₹8,00,000

Correct Answer:

₹8,00,000

Explanation:

The correct answer is option 4- ₹8,00,000.

Working capital = Current assets - Current liabilities
                       = 15,00,000 - 7,00,000
                       = ₹8,00,000