Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

Read the following information and answer the following question.

PARTICULARS AMOUNT (₹)
Gross profit ₹1,00,000
Working capital ₹25,000
Office and administrative expenses ₹10,000
Selling and distribution expenses ₹25,000
Interest on long-term debts ₹8,000
Tax ₹12,000
Non-current assets ₹3,00,000
Current assets ₹1,50,000
Current liabilities ₹1,25,000

Calculate the capital employed of the company.

Options:

₹3,00,000

₹3,15,000

₹3,25,000

₹3,50,000

Correct Answer:

₹3,25,000

Explanation:

The correct answer is option 3- ₹3,25,000.

Capital employed = Non-current assets + working capital
                            = Non-current assets + (Current assets - Current liabilities)
                            = 3,00,000 + 25,000
                            = ₹3,25,000