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Class 12 Tuition > Learn Accountancy > The ratio of current Assets (Rs. 9,00,000) to current...
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The ratio of current Assets (Rs. 9,00,000) to current liabilities is 1.5:1. The accountant of this Firm is interested in maintaining a current ratio of 2:1 by paying some part of current liabilities. You are required to suggest him the amount of current liabilities which must be paid for the Purpose.

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The given rate of current asset(CA) to current liabilities (CL) is 1.5:1. And CA are given Rs 9,00,000. In such a situation if Accountant of the firm wants to maintain ratio of CA:CL at 2:1 then he can do this by paying CL for smoamo Rs 3,00,000 which will reduce CL as Rs 6,00,000 - Rs 3,00,000 = Rs...
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The given rate of current asset(CA) to current liabilities (CL) is 1.5:1. And CA are given Rs 9,00,000. In such a situation if Accountant of the firm wants to maintain ratio of CA:CL at 2:1 then he can do this by paying CL for smoamo Rs 3,00,000 which will reduce CL as Rs 6,00,000 - Rs 3,00,000 = Rs 3,00,000.

At the same time, to pay CL we need to reduce Cash/Bank, then CA will be 

Rs 9,00,000 - Rs 3,00,000 =  Rs 6,00,000.

This now we have CA:CL

Rs 6,00,000 :Rs 3,00,000  i.e   2:1

 

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The amount paid should be Rs 300000 Because if he will pay Rs 300000, his current liabilities will reduce and become Rs 300000 and also because he will pay in cash or by cheque,his current assets will also reduce by Rs300000 and become Rs 600000 Thus the ratio of CA:CL=600000:300000=2:1
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CA:CL =1.5:1 CA = 1.5 = Rs 9,00,000 CL = 1 = ? CL = Rs (9,00,000*1)/1.5 = Rs 6,00,000. If accountants wants to maintain the ratio of 2:1 then CL will be CL = (Rs 9,00,000*1)/2 = Rs 4,50,000. Amount to be paid for the purpose = Rs 1,50,000.
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