Question 55 Chapter 4 of +2-B
Table of Contents
Trade Payable Turnover Ratio
55. (Net Purchases/Trade Payable T/O Ratio/Stock T/O Ratio & GP are given) Find out
(i) Net purchases (ii) Trade Payable turnover ratio
Gross profit on sales (Revenue from Operation) is 20% and the value of gross profit is ₹ 60,000 inventory turnover ratio is 6 times and the opening inventory is ₹ 8,000 less than the closing inventory. Opening sundry trade payable ₹ 40,000 and closing sundry trade payable is ₹ 50,000.
The solution of Question 55 Chapter 4 of +2-B: –
| Gross profit | = | 20% on sales |
| Cost of goods sold | = | 80% of sales |
| Sales | = | Cost of goods sold + Profit |
| = | ₹ 80+ ₹ 20 |
| Cost of goods sold | = | 80 | X | 60,000 |
| 20 | ||||
| = | ₹ 2,40,000 |
| Inventory Turnover Ratio | = | Cost of goods sold |
| Average inventory | ||
| 6 | = | 1,40,000 |
| Average inventory | ||
| Average Inventory | = | 2,40,000 |
| 6 | ||
| Average Inventory | = | ₹ 40,000 |
| Average Inventory | = | Opening Inventory + Closing Inventory |
| 2 | ||
| Let assume Closing Inventory | = | x |
| Opening Inventory | = | x – ₹ 8,000 |
| Average Inventory | = | (x – ₹ 8,000) + x |
| 2 | ||
| ₹ 40,000 | = | 2x – ₹ 8,000 |
| 2 | ||
| ₹ 40,000 x 2 | = | 2x – ₹ 8,000 |
| ₹ 80,000 | = | 2x – ₹ 8,000 |
| ₹ 80,000 + ₹ 8,000 | = | 2x |
| = | ₹ 88,000 | |
| 2 | ||
| Closing Inventory | = | ₹ 44,000 |
| Opening Inventory | = | Closing Inventory – ₹ 8,000 |
| = | ₹ 44,000 – ₹ 8,000 | |
| = | ₹ 36,000 |
(a) Computation of net purchases
| Cost of goods sold | = | Opening Inventory + Purchases – Closing Inventory |
| ₹ 2,40,000 | = | ₹ 36,000 + Purchases – ₹ 44,000 |
| Purchases | = | ₹ 2,40,000 + ₹ 8,000 |
| = | ₹ 2,48,000 |
(b) Accounts Payable Turnover Ratio
| = | Net Purchases (Credit) | |
| Average Accounts Payable | ||
| Average accounts payable | = | Opening accounts payable + Closing accounts payable |
| 2 | ||
| = | ₹ 40,000 + ₹ 50,000 | |
| 2 | ||
| = | ₹ 45,000 | |
| = | ₹ 2,48,000 | |
| Accounts Payable Turnover Ratio | ₹ 45,000 | |
| = | 5.51 times |
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
