Question 83 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 83 Chapter 4 of +2-B

Question 83 Chapter 4 of +2-B

Interest Coverage Ratio

83. Rs. 1,75,000 is the Credit Revenue from Operations, i.e., Net Credit Sales of an enterprise. If Trade Receivables Turnover Ratio is 8 times, calculate Trade Receivables in the Beginning and at the end of the year. Trade Receivables at the end is 7,000 more than that in the beginning.

 

The solution of Question 83 Chapter 4 of +2-B: –

 

Trade Receivable Turnover Ratio Net Credit Sales
Average Trade Receivable
8 Rs. 1,75,000
Average Trade Receivable
Average Trade Receivable Rs. 1,75,000
8
  = Rs. 21,875
Opening Trade Receivables = X
Closing Trade Receivables = X + Rs. 7,000

 

 

Average Trade Receivables Opening Trade Receivables +Closing Trade Receivables
2
Rs. 21,875 X + (X + Rs. 7,000)
2
Rs. 21,875 x 2 = 2x + Rs. 7,000)
Rs. 43,750 = 2x + Rs. 7,000)
2x = Rs. 43,750 – Rs. 7,000

 

 

X Rs. 36,750
2
  = Rs. 18,375
Opening Trade Receivables = Rs. 18,375
Closing Trade Receivables = Rs. 25,375

 

 

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)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

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T.S. Grewal’s Analysis of Financial Statements

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