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ACC501 GDB Fall 2019 Solution & Discussion

ACC501 GDB Fall 2019 Solution & Discussion

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Dear sir

Can any one send idea solution of acc501 please 2 days left please

Mr. Ali started his entrepreneurial venture in 2015. Due to his hard work and determination, he had become a successful entrepreneur till 2019. In 2019, he turned his business firm into a larger supplier of "clinker - a necessary element of material used in cement manufacturing. A local cement manufacturing unit, Star Cement wants to purchase material from Mr. Ali on credit period of 90 days. Current and quick ratios of Star Cement at the end of 2018 are 1.70:1 (Rs. 7.521/Rs. 4,424) and 1.46:1 (Rs. 6,450/Rs. 4,424) respectively.

+ ! ! ! ! Mehαr Mαh꧂

thanks for sharing

CC501 Business Finance GDB 1 Solution/Discussion Fall 2019

Solution idea:

Mr. Ali started his entrepreneurial venture in 2015. Due to his hard work and determination, he had become a successful entrepreneur till 2019. In 2019, he turned his business firm into a larger supplier of "clinker - a necessary element of material used in cement manufacturing. A local cement manufacturing unit, Star Cement wants to purchase material from Mr. Ali on credit period of 90 days. Current and quick ratios of Star Cement at the end of 2018 are 1.70:1 (Rs. 7.521/Rs. 4,424) and 1.46:1 (Rs. 6,450/Rs. 4,424) respectively.

ACC501 solution.

ACC501.docx

Required:
Which balance sheet items of Star Cement will be affected if Ali supplied clinker of Rs. 2,500 on account?
Item on current liabilities (Accounts Payable) side will be increase for Star Cements, if Ali Supplied clinker of Rs.2,500/- on 90 days credit period.

Based upon the given information in question, what will be the new current ratio of Star Cement if Mr. Ali supplies material of Rs. 2,500 on account?
Current ratio = Current asset / current liabilities 7,521/Rs. 4,424 = 1.70
Current ratio after supplies of Rs. 2,500/-: Current liabilities will be increase after supplies to Star cement which will also increase the inventory on current asset side.
So
Current assets = 7,521 + 2,500 = 10,021/-
Current liability = 4,424 + 2,500 = 6,924‬/-
Current ratio = 10,021 / 6,924
Current ratio = 1.44

Based upon the given information in question, what will be the new quick ratio of Star Cement if Mr. Ali supplies material of Rs. 2.500 on account?
Quick ratio = Current asset – Inventory / current liabilities
Quick ratio = 6,450/Rs. 4,424 1.46
Quick ratio after supplies of Rs. 2,500/-: current liability will be increase after supplies.
So
Quick ratio = 6,450 / 4,424 + 2,500
Quick ratio = 0.93

Based on the answers of (b) and (c), which particular ratio (current or quick) will be affected more by this purchase on account?
Quick ratio affects more by the purchase on account of star cement if Ali supplies 2,500/- of clinker.

ACC501-Business Finance GDB Solution 2019

Dear sir

Please send me solution gdb acc 501 please correct solution all words changed please help me aja last day han bhai

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