Study the information given below carefully and answer the following question.
Radhika an alumni of IIM Bangalore initiated her startup Radhika Ltd. in 2020. The profits of Radhika Ltd in the year 2021-2022 after all appropriations was ₹31,25,000. This profit was arrived after taking into consideration the following items:-
| S No | Particulars | Amount ( In ₹) |
| 1 | Gain of sale of assets | 12,50,000 |
| 2 | Goodwill written off | 7,80,000 |
| 3 | Transfer to general Reserve | 8,75,000 |
| 4 | Provision for taxation | 4,37,500 |
Additional Information:
| S No | Particulars | 31.03.2022 ( In ₹) |
31.03.2021 (In ₹) |
| 1 | Prepaid Expenses | 7,50,000 | 5,00,000 |
| 2 | Inventory | 10,50,000 | 8,20,000 |
| 3 | Trades Payable | 4,50,000 | 3,50,000 |
| 4 | Trade Receivable | 6,20,000 | 5,90,000 |
What is the change in current liabilities?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- Increase by ₹1,00,000.
Increase in Current liabilities (Trade Payables) = 4,50,000 - 3,50,000
= 1,00,000