Question 52 Chapter 4 of +2-B
Table of Contents
Trade Payable Turnover Ratio
52. (Average Age of Trade Payable) A company purchases goods both for cash and on Credit. Following information is available.
| ₹ | |
| Total Purchases | 4,00,000 |
| Cash Purchases (included in above) | 50,000 |
| Return outwards | 10,000 |
| Trade Payable (Closing) | 75,000 |
| Bills Payable (Closing) | 5,000 |
Calculate average age of trade payable. Assuming 365 days in the year.
The solution of Question 52 Chapter 4 of +2-B: –
| Average Age of Trade Payable | = | No. of days in a year |
| Trade Payable Turnover ratio | ||
| or | ||
| = | Average Accounts Payable x No. of days in a year | |
| Annual credit (Net) Purchases | ||
| Account Payable | = | Creditors + Bills Payable |
| = | ₹ 75,000 + ₹ 5,000 | |
| = | ₹ 80,000 | |
| Annual Credit Purchase | = | Total Purchases – (Cash Purchases + Purchases Return) |
| = | ₹ 4,00,000 – (₹ 50,000 + ₹ 10,000) | |
| = | ₹ 4,00,000 – ₹ 60,000 | |
| = | ₹ 3,40,000 | |
| Average Age of Trade Payable | = | ₹ 80,000 x 365 |
| ₹ 3,40,000 |
| Average trade receivable | = | 86 days |
Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
