Question 53 Chapter 4 of +2-B

Question 53 Chapter 4 of +2-B

III. Activity Ratios

Trade Receivable Turnover Ratio

53. (Opening Creditors when Trade Payable T/O Ratio & Closing Creditors are given) From the following information, calculate creditors at the beginning of the year :

 
Total Purchases22,00,000 
Cash Purchases (included in above)10,00,000 
Trade Payable turnover ratio-4 times Creditors (closing) 2,50,000

 

The solution of Question 53 Chapter 4 of +2-B: – 

 

Trade Payable Turnover ratio=Net credit Purchases
Average Trade Payable
   
Net credit Purchases=Total Purchases – Cash Purchases
 =₹ 22,00,000 + ₹ 10,00,000
Account Payable=₹ 12,00,000
   
Average Trade Payable=Opening trade Payable + Closing Trade Payable
2
   
Average Trade Payable=Net credit Purchases
Trade Payable Turnover ratio
   
 =₹ 12,00,000
 4
   
 =₹ 3,00,000
   
₹ 3,00,000=Opening trade Payable + ₹ 2,50,000
2
   
₹ 3,00,000 x 2=Opening trade Payable + ₹ 2,50,000
₹ 6,00,000=Opening trade Payable + ₹ 2,50,000
Opening trade Payable=₹ 6,00,000 – ₹ 2,50,000
 =₹ 3,50,000

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 53 Chapter 4 of +2-B  - USHA Publication  12 Class
T.S. Grewal’s Analysis of Financial Statements

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