12thtsgrewalsolution2026-2027

Question 26:

Current Assets of a company is are ₹5,00,000. Its Current Ratio is 2.5:1 and Quick Ratio is 1 : 1. Calculate value of Current Liabilities, Liquid Assets and Inventory.

Answer:

Current ratio= Current assets/Current liabilities=2.5/1

Quick ratio= Liquid assets/Current liabilities=1/1

Current Assets = 5,00,000

Current ratio= Current assets/Current liabilities=5,00,000/2.5=2,00,000

Liquid Assets = Current Liabilities × 1 = 2,00,000

Inventory = Current Assets − Quick Assets

= 5,00,000 − 2,00,000 = 3,00,000

Question 27:

Working Capital ₹3,60,000; Total :Debts ₹7,80,000; Long-term Debts ₹6,00,000; Inventories ₹1,80,000. Calculate Liquid Ratio.

Answer:

Current Liabilities = Total Debts − Long-term Debts

= 7,80,000 − 6,00,000 = 1,80,000

Current Assets = Current Liabilities + Working Capital

= 1,80,000 + 3,60,000 = 5,40,000

Quick Assets = Current Assets − Stock

= 5,40,000 − 1,80,000 = 3,60,000

Current ratio= Quick assets/Current liabilities=3,60,000/1,80,000=2:1

Question 28:

Calculate Quick Ratio from the following:

Working Capital ₹4,00,000; Total Debts ₹18,00,000; Non-Current Liabilities ₹16.00,000; Inventories ₹1,90,000; Prepaid Expenses ₹10,000.

Answer:

Quick Ratio= Quick Assets/ Current Liabilities

Quick Ratio= 4,00,000/2,00,000=2:1

Current Liabilities=Total Debts ₹(18,00,000) -Non-Current Liabilities ₹(16.00,000)=12,00,000

Current Assets=Current Liabilities -Working Capital

6,00,000=2,00,000+4,00,000

Quick Assets=Current Assets-(Inventories+Prepaid Expenses)

4,00,000= 6,00,000-(1,90,000+10,000)

Question 29:

Quick Ratio of a company is 2:1. State giving reasons, which of the following transactions would (i) improve, (ii) reduce, (iii) Not change the Quick Ratio:
(a) Purchase of goods for cash; (b) Purchase of goods on credit; (c) Sale of goods (costing ₹20,000) for ₹20,000; (d) Sale of goods (costing ₹20,000) for ₹22,000; (e) Cash received from Trade Receivables.

Answer:

Quick Ratio = 2:1

Let Quick Assets be = ₹40,000

Current Liabilities = ₹20,000

(a) Purchase of goods for Cash- Reduce

Reason: This transaction will result decrease in cash and increases in stock. Liquid Asset will decrease due payment for goods purchased.

Example: Purchase of goods ₹10,000 for cash

Quick Assets = 40,000 − 10,000 (Cash) = ₹30,000

Quick ratio (After purchase of Assets)= (40,000-10,000)/20,000=1.5:1

(b) Purchase of goods on Credit- Reduce

Reason: Purchase of goods on credit will result increase in Current Liabilities and no change in Quick Assets.

Example: if Purchase of goods on Credit ₹10,000

Current Liabilities = 20,000 + 10,000 (Creditors) = ₹30,000

Quick ratio (After purchase of goods on credit)= 40,000/(20,000+10,000)=1.33:1

Reason: Sale of goods will result in increase in Quick Assets by the amount of ₹40,000 in the form of either in cash or debtor. This transaction will result no change in current liabilities.

Quick ratio (After sale of goods)= (40,000+20,000)/20,000=3:1

(d) Sale of goods costing ₹20,000 of or ₹22,000- Improve

Reason: This transaction will increase the Quick Assets by ₹22,000 in the form of either in cash or debtors but no effect on the Current Liabilities.

Quick Assets after sale of goods = 40,000 + 22,000 = ₹62,000

Quick Ratio after sale of goods= (40,000+22,000)/20,000=3.1:1

(e) Cash received from debtors- No change

Reason: This transaction results increase in one quick asset in the form of cash and decrease in other quick asset in the form of debtor with equal amount. Therefore it result in no change in the total of Quick Assets.

Example: Cash received from debtors ₹10,000

Quick Assets = 40,000 + 10,000 (Cash) − 10,000 (Debtors) = 40,000

Quick ratio (After cash received from debtors)

= (40,000-10,000+10,000)/20,000=2:1

Question 30:

Quick Ratio of Z Ltd. is 1:1. State, with reason, which of the following transactions would (i) Increase (ii) Decrease or (ii) Not change the ratio.

(a) Creditors of ₹10,000 were paid on due date

(b) Debentures of 50,000 were converted into equity shares.

(CBSE 2014)

Answer:

Transaction	Impact	Reason
Creditors of ₹10,000 were paid on due date	Not change	As cash is going out, quick assets are decreasing by 10,000 and same amount is decreasing from current liabilities.
Converted Debentures into Equity shares	Not change	As Debenture and Equity shares are not the part of Quick assets and Current liabilities. So, quick ratio will not change.