Quick Assets of the firm are:

Quick Assets (Liquid Assets) are current assets that can be quickly converted into cash, typically within a short period. They exclude inventories and prepaid expenses.

Formula:

Quick Assets = Current Assets - Inventories - Prepaid Expenses

Or directly:

Quick Assets = Trade Receivables + Cash and Cash Equivalents + Marketable Securities

Identifying Quick Assets from given information:

Items to include:

• Trade Receivables = Rs. 50,000 ✓
• Cash and Cash Equivalents = Rs. 30,000 ✓

Items to exclude:

• Inventories = Rs. 50,000 (Not quickly convertible to cash)
• Advance Tax = Rs. 4,000 (Current asset but not a quick asset)
• Trade Payables = Rs. 1,00,000 (This is a liability)
• Bank overdraft = Rs. 4,000 (This is a liability)

Calculation:

Quick Assets = Trade Receivables + Cash and Cash Equivalents

Quick Assets = Rs. 50,000 + Rs. 30,000

Quick Assets = Rs. 80,000

Note: Advance Tax is excluded because it represents a prepaid amount that cannot be converted back into cash. It will only be adjusted against tax liability. Bank overdraft is a liability, not an asset, so it is not included in quick assets calculation.