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Question 47 Chapter 14 of Class 12 Part – 2 – 2024
Trade Receivable Turnover Ratio
47. (Calculation of Trade Receivable at the beginning & at the end) ₹ 1,75,000 is the net credit sales (Revenue from Operation) of a concern during the year. If revenue from operation turnover is 8 times, calculate trade receivable in the beginning and at the end of the year. Trade receivable at the end is ₹ 7,000 more than at the beginning.
| Trade Receivable Turnover Ratio | = | Net Credit Sales |
| Average Trade Receivable | ||
| 8 | = | Net Credit Sales |
| Average Trade Receivable | ||
| Average Trade Receivable | = | Net Credit Sales |
| Trade Receivable Turnover Ratio | ||
| = | ₹ 1,75,000 | |
| 8 | ||
| = | ₹ 21,875 |
| Average Trade Receivable | = | Opening Trade Receivable + Closing Trade Receivable |
| 2 | ||
| Let assume Opening trade receivable | = | x |
| Closing trade receivable | = | x + ₹ 7,000 |
| ₹ 21,875 | = | x + (x + ₹ 7,000) |
| 2 | ||
| ₹ 21,875 x 2 | = | x + (x + ₹ 7,000) |
| ₹ 43,750 | = | 2x + ₹ 7,000) |
| ₹ 43,750 - ₹ 7,000 | = | 2x |
| ₹ 36,750 | = | 2x |
| x | = | ₹ 36,750 |
| 2 | ||
| = | ₹ 18,375 | |
| Closing trade receivable | = | ₹ 18,375 + ₹ 7,000 |
| = | ₹ 25,375 |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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