Practical Problem 11

SOLUTION:

(1) Current Assets = Debtors + Stock + Loose Tools

                              = 1,20,000 + 60,000 + 20,000

                              = ₹ 2,00,000

(2) Current liabilities = Creditors + Bills payable + Bank overdraft

                                 = 60,000 + 40,000 + 20,000

                                 = ₹ 1,20,000

(3) Current ratio = Current Assets ÷ Current Liabilities 

∴ Current Ratio = 200000/120000 

∴ Current Ratio =5/3

∴ Current Ratio = 5:3