Ratio of current assets (Rs 300000) to current liabilities (Rs 200000) is 1.5:1 .The accountant of the firm is interested inn maintaining a current ratio of 2:1 by paying of a part of the curent liabilites compute amount of the current liabilities that should be paid so that the current ratio at the level of 2:1 may be maintained

Explanation

Let the amount of Current Liabilities to be paid off be x
then,
`(Rs 3,00,000-x)/(Rs. 2,00,000-x) = (2)/(1)`
implies Rs. 3,00,000 - x = Rs. 4,00,000 - 2x,
x = Rs. 1,00,000.
`therefore` The amount of Current Liabilities to be paid off is Rs. 1,00,000.