19 Views

Question : The ratio of Current Assets (Rs.16,00,000) to Current Liabilities (Rs.10,00,000) is 1.6: 1. The accountant of the firm is interested in maintaining a Current Ratio of 2: 1, by paying off a part of the Current Liabilities. The amount of the Current Liabilities will be that should be paid, so that the Current Ratio at the level 2: 1 may be maintained.

Option 1: Rs 4,00,000

Option 2: Rs 5,00,000

Option 3: Rs 8,00,000

Option 4: Rs 10,00,000


Team Careers360 16th Jan, 2024
Answer (1)
Team Careers360 22nd Jan, 2024

Correct Answer: Rs 4,00,000


Solution : Answer = Rs 4,00,000

C. Assets = 16,00,000

C. liab = 10,00,000

C.Ratio =1.6:1

Let the amount of the current liab should be paid = $x$

$\frac{16,00,000-x}{10,00,000-x}$ =   $\frac{2}{1}$

16,00,000-$x$ = 20,00,000 - 2$x$

$x$ = 4,00,000

C. liab should be paid = Rs. 4,00,000
Hence, the correct option is 1.

Related Questions

UPES B.Tech Admissions 2026
Apply
Ranked #43 among Engineering colleges in India by NIRF | Highest Package 1.3 CR , 100% Placements
UPES Integrated LLB Admission...
Apply
Ranked #18 amongst Institutions in India by NIRF | Ranked #1 in India for Academic Reputation by QS Rankings | 16 LPA Highest CTC
Presidency University MBA Adm...
Apply
NAAC A+ Accredited | Highest CTC 10 LPA | Top Recruiters : Amazon, Accenture, KPMG, EY, Capgemini & many more
Nirma University Law Admissio...
Apply
Grade 'A+' accredited by NAAC | Ranked 33rd by NIRF 2025
UPES M.Tech Admissions 2026
Apply
Ranked #45 Among Universities in India by NIRF | 1950+ Students Placed 91% Placement, 800+ Recruiters
UPES | BBA Admissions 2026
Apply
#36 in NIRF, NAAC ‘A’ Grade | 100% Placement, up to 30% meritorious scholarships
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books