Question 54 Chapter 4 of +2-B
Table of Contents
Trade Payable Turnover Ratio
54. (Trade Payable T/O Ratio & Average Payment Period) Calculate (i) Trade Payable turnover ratio and (ii) average payment period.
| 2016 ₹ | 2017 ₹ | |
| Annual credit purchases | 6,80,000 | 7,50,000 |
| Creditors on January 1 | 80,000 | 60,000 |
| Creditors on December 31 | 60,000 | 90,000 |
Take 360 days in a year
The solution of Question 54 Chapter 4 of +2-B: –
2016
| Trade Payable Turnover ratio | = | Net credit Purchases |
| Average Trade Payable | ||
| Average Trade Payable | = | Opening trade Payable + Closing Trade Payable |
| 2 | ||
| Net credit Purchases | = | ₹ 6,80,000 |
| = | ₹ 80,000 + ₹ 60,000 | |
| 2 | ||
| = | ₹ 70,000 | |
| Trade Payable Turnover ratio | = | ₹ 6,80,000 |
| ₹ 70,000 | ||
| = | 9.71 times | |
| Average Payment period | = | No. of days in a year |
| Trade Payable Turnover ratio | ||
| = | 360 | |
| 9.71 | ||
| = | 37 days |
2017
| Net credit Purchases | = | ₹ 7,50,000 |
| = | ₹ 60,000 + ₹ 90,000 | |
| 2 | ||
| = | ₹ 75,000 | |
| Trade Payable Turnover ratio | = | ₹ 7,50,000 |
| ₹ 75,000 | ||
| = | 10 times | |
| Average Payment period | = | No. of days in a year |
| Trade Payable Turnover ratio | ||
| = | 360 | |
| 10 | ||
| = | 36 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
