15 :- A firm had Current Liabilities of Rs 5,40,000. It purchased stock of Rs 60,000 on credit. After the purchase of stock, Current Ratio was 2:1. Calculate Current Assets and Working Capital after and before the stock was purchased.
Solution :-
Current Liabilities = Rs 5,40,000
Stock Purchased = Rs 60,000
Current Liabilities after Stock Purchased on Credit = 5,40,000 + 60,000
= Rs 6,00,000
Current Ratio after Stock Purchased = Current Assets + Stock/ Current Liabilities after stock purchased
2 = Current Assets + 60,000/6,00,000
6,00,000 x 2 = Current Assets + 60,000
12,00,000 = Current Assets + 60,000
Current Assets (Before stock purchased) = 12,00,000 – 60,000
= Rs 11,40,000
Current Assets after Stock Purchased = 11,40,000 + 60,000 = Rs 12,00,000
Working Capital before Purchase = Current assets before Purchase – Current Liabilities before Purchase
= 11,40,000 – 5,40,000
= Rs 6,00,000
Working Capital after Stock Purchased = Current assets after Purchase – Current Liabilities after Purchase
= 12,00,000 – 6,00,000
= Rs 6,00,000