CBSE 2025, Compartment, Set 1

Question

Calculate Current Assets and Quick Assets of a company from the following information:
Quick Ratio = 0.70 : 1
Inventory Turnover Ratio = 5 times
Inventory at the end was ₹20,000 more than inventory in the beginning.
Gross Profit = ₹75,000
Current Liabilities = ₹80,000
Revenue from Operations = ₹4,00,000

Edvaya · Accepted Answer

The correct answer is Subjective. **1. Calculation of Cost of Revenue from Operations:** Cost of Revenue from Operations = Revenue from Operations - Gross Profit $ = 4,00,000 - 75,000 = ₹3,25,000$. **2. Calculation of Average Inventory:** Inventory Turnover Ratio = Cost of Revenue from Operations / Average Inventory $ 5 = 3,25,000 / 	ext{Average Inventory} $ Average Inventory = $3,25,000 / 5 = ₹65,000$. **3. Calculation of Closing Inventory:** Let Opening Inventory be $x$. Closing Inventory = $x + 20,000$. Average Inventory = $(x + x + 20,000) / 2 = 65,000$ $ 2x + 20,000 = 1,30,000 $ $ 2x = 1,10,000 \Rightarrow x = 55,000 $ (Opening Inventory). Closing Inventory = $55,000 + 20,000 = ₹75,000$. **4. Calculation of Quick Assets:** Quick Ratio = Quick Assets / Current Liabilities $ 0.70 = 	ext{Quick Assets} / 80,000 $ Quick Assets = $80,000 	imes 0.70 = ₹56,000$. **5. Calculation of Current Assets:** Current Assets = Quick Assets + Closing Inventory $ = 56,000 + 75,000 = ₹1,31,000$.

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Accountancy > Financial Statements Analysis > Accounting Ratios

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