X Ltd. has a current ratio of 3:1 and quick ratio of 2:1. If excess of current assets over quick assets, represented by inventories is Rs. 5,000, calculate current assets and quick assets.

Given information:

• Current Ratio = 3:1
• Quick Ratio = 2:1
• Inventories = Rs. 5,000

The relationship between current assets and quick assets is:

Current Assets = Quick Assets + Inventories

Let Current Liabilities = $x$

From Current Ratio:

$\text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}} = \frac{3}{1}$

Current Assets = $3x$

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From Quick Ratio:

$\text{Quick Ratio} = \frac{\text{Quick Assets}}{\text{Current Liabilities}} = \frac{2}{1}$

Quick Assets = $2x$

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Since Inventories represent the excess of current assets over quick assets:

Current Assets - Quick Assets = Inventories

$3x - 2x = 5,000$

$x = 5,000$

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Therefore:

• Current Assets = $3x$ = $3 \times 5,000$ = Rs. 15,000
• Quick Assets = $2x$ = $2 \times 5,000$ = Rs. 10,000

Verification: Current Assets - Quick Assets = 15,000 - 10,000 = Rs. 5,000 (Inventories) ✓

Option 1 is correct.