Question 49 Chapter 4 of +2-B

Question 49 Chapter 4 of +2-B

III. Activity Ratios

Trade Receivable Turnover Ratio

49. (Trade Receivable T/O Ratio when Provision for Doubtful Debt is given) ABC Ltd Provides the following information

Trade Receivable in the beginning₹ 10,00,000 
Trade Receivable at the end ₹ 1,50,000 
 Cash sales during the year (Revenue from Operation)₹ 2,50,000 
Credit sales during the year (Revenue from Operation) 
Return inwards  
Provision for bad and doubtful debts 


The solution of Question 49 Chapter 4 of +2-B: – 


Trade Receivable Turnover Ratio=Net Credit annual sales
Average trade receivable
Net Credit Sales=Total Credit Sales – Sales Return
 =₹ 2,50,000 – ₹ 10,000
 =₹ 2,40,000
Average Trade Receivable=Trade Receivable in the beginning + Trade Receivable at the end
 =₹ 50,000 + ₹ 30,000
Average trade receivable=₹ 40,000
Trade Receivable Turnover Ratio=₹ 2,40,000
₹ 40,000
 =6 times
Average Collection Period=Number of days in the year
Trade Receivable turnover ratio
Average trade receivable=360
Average Collection Period=60 Days


Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 3 min 225x300 - Question 49 Chapter 4 of +2-B  - USHA Publication  12 Class
T.S. Grewal’s Analysis of Financial Statements

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