X Ltd., has a current ratio of 3:1 and quick ratio of 2:1. If excess of current assets over quick assets, represented by inventories is ₹5,000, calculate current assets and quick assets.
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹15,000; ₹10,000.
Current ratio = 3:1
Quick ratio of 2:1
Excess of current assets over quick assets is inventories = ₹5,000
Let current assets = 3
Quick assets = 2
Inventory = 3 -2
= 1
If inventory is 1 then current assets = 3
If inventory is 5,000 then current assets = 3/1 x 5,000
= 15,000
Quick assets = Current assets - Inventory
= 15,000 - 5,000
= 10,000