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Question
A company had Current Assets of ₹ 3,00,000 and Current Liabilities of ₹ 1,50,000, having a current Ratio of 2 : 1. What will be its revised Current Ratio after it endorses a bills receivable of ₹ 40,000 to one of its creditors?
Solution
Given: Current Assets = ₹ 3,00,000
Current Liabilities = ₹ 1,50,000
Bills receivable = ₹ 40,000
Current Ratio = 2 : 1
Revised Current Assets = Current Assets − Bills receivable
= ₹ 3,00,000 − ₹ 40,000
= ₹ 2,60,000
Revised Current Liabilities = Current Liabilities − Bills receivable
= ₹ 1,50,000 − ₹ 40,000
= ₹ 1,10,000
∴ Revised Current Ratio = `"Revised Current Assets"/"Revised Current Liabilities"`
= `(2,60,000)/(1,10,000)`
= 2 : 36 : 1
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