Financial ManagementQuestion 5504 of 217
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7. Current Assets and Current Liabilities would be:

Options

A30 Lakh and 20 Lakh
B45 Lakh and 30 Lakh
C60 Lakh and 40 Lakh
D75 Lakh and 50 Lakh
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Correct Answer

✅ Option C — 60 Lakh and 40 Lakh

All Options:

  • A30 Lakh and 20 Lakh
  • B45 Lakh and 30 Lakh
  • C60 Lakh and 40 Lakh ✓
  • D75 Lakh and 50 Lakh

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Detailed Solution & Explanation

To calculate the Current Assets (CA) and Current Liabilities (CL) for VP Ltd.:

**1. Ratios and Relationships:**
* Current Ratio = Current Assets (CA)Current Liabilities (CL)=1.5  ⟹  CA=1.5⋅CL\displaystyle \frac{\text{Current Assets (CA)}}{\text{Current Liabilities (CL)}} = 1.5 \implies \text{CA} = 1.5 \cdot \text{CL}
* Quick Ratio = Quick Assets (QA)Current Liabilities (CL)=1.0  ⟹  QA=1.0⋅CL\displaystyle \frac{\text{Quick Assets (QA)}}{\text{Current Liabilities (CL)}} = 1.0 \implies \text{QA} = 1.0 \cdot \text{CL}

**2. Utilizing Inventory:**
* QA=CA−Inventory\displaystyle \text{QA} = \text{CA} - \text{Inventory}
* Inventory=CA−QA=1.5⋅CL−1.0⋅CL=0.5⋅CL\displaystyle \text{Inventory} = \text{CA} - \text{QA} = 1.5 \cdot \text{CL} - 1.0 \cdot \text{CL} = 0.5 \cdot \text{CL}

**3. Solving for Current Liabilities (CL) and Current Assets (CA):**
* From Question 6, Inventory = Rs. 20 Lakh\displaystyle \text{Rs. } 20 \text{ Lakh}
* 0.5⋅CL=Rs. 20 Lakh  ⟹  CL=Rs. 20 Lakh0.5=Rs. 40 Lakh\displaystyle 0.5 \cdot \text{CL} = \text{Rs. } 20 \text{ Lakh} \implies \text{CL} = \frac{\text{Rs. } 20 \text{ Lakh}}{0.5} = \text{Rs. } 40 \text{ Lakh}
* CA=1.5⋅CL=1.5×Rs. 40 Lakh=Rs. 60 Lakh\displaystyle \text{CA} = 1.5 \cdot \text{CL} = 1.5 \times \text{Rs. } 40 \text{ Lakh} = \text{Rs. } 60 \text{ Lakh}

Therefore, Current Assets are `Rs. 60 Lakh` and Current Liabilities are `Rs. 40 Lakh`.

Hence, **Option C** is the correct answer.

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