Question 81 Chapter 4 of +2-B
Table of Contents
Interest Coverage Ratio
81.Closing Trade Receivables Rs. 1,00,000; Cash Sales being 25% of Credit
Sales; Excess of Closing Trade Receivables over Opening Trade Receivables Rs. 40,000; Revenue from Operations, i.e., Net Sales Rs. 6,00,000.
Calculate the Trade Receivables Turnover Ratio.
The solution of Question 81 Chapter 4 of +2-B: –
| Credit Sales | = | X |
| Cash Sales | = | X | x | 25 | = | 25x |
| 100 | 100 |
Total Sales = Cash Sales + Credit Sales
| Rs. 6,00,000 | = | X | x | 25x | + | X |
| 100 |
| Rs. 6,00,000 x 100 | = | 25x X 100 |
| Rs. 6,00,00,000 | = | 125x |
| X | = | Rs. 6,00,00,000 |
| 125 | ||
| Credit Sales | = | Rs. 4,80,000 |
| Closing Trade Receivables | = | Opening Trade Receivables + 40,000 |
| Rs. 1,00,000 | = | Opening Trade Receivables + 40,000 |
| = | Rs. 1,00,000 – Rs.40,000 | |
| Opening Trade Receivables | = | Rs. 60,000 |
| Average Trade Receivable | = | Opening Trade Receivable + Closing Trade Receivable |
| 2 |
| Average Trade Receivable | = | Rs. 1,00,000 + Rs. 60,000 |
| 2 | ||
| = | Rs. 80,000 |
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| Inventory Turnover Ratio | = | Credit Sales |
| Average Trade Receivable |
| Inventory Turnover Ratio | = | Rs. 4,80,000 |
| Rs. 80,000 | ||
| = | 6 Times |
Balance Sheet: Meaning, Format & Examples
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Also, Check out the solved question of previous Chapters: –
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
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