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Question 88 Chapter 4 of +2-B
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Table of Contents
Trade Receivables Turnover Ratio
88. A limited company made Credit Sales of Rs. 4,00,000 during the financial
period. If the collection period is 36 days and year is assumed to be 360 days, calculate:
I. Trade Receivables Turnover Ratio;
II. Average Trade Receivables;
III. Trade Receivables at the end when Trade Receivables at the end are more than that in the beginning by 6,000.
The solution of Question 88 Chapter 4 of +2-B: –
| Debt Collection Period | = | 360 |
| Trade Receivables Turnover Ratio |
| 36 | = | 360 |
| Trade Receivables Turnover Ratio | ||
| = | 360 | |
| 36 | ||
| = | 10 Times |
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| (ii)Trade Receivables Turnover Ratio | = | Net Credit Sales |
| Average Trade Receivable |
| 10 | = | Rs. 4,00,000 |
| Average Trade Receivable | ||
| = | Rs. 4,00,000 | |
| 10 | ||
| Average Trade Receivable | = | Rs. 40,000 |
| (iii) Opening Trade Receivables | = | X |
| = | x + 6,000 | |
| Average Trade Receivable | = | Opening Trade Receivable + Closing Trade Receivable |
| 2 | ||
| Rs. 40,000 | = | X + (x+ Rs. 6,000) |
| 2 | ||
| Rs. 80,0000 | = | 2x + Rs. 6,000 |
| 2x | = | Rs. 80,000 – Rs. 6,000 |
| 2x | = | Rs. 74,000 |
| X | = | Rs. 74,000 |
| 2 | ||
| X | = | Rs. 37,000 |
| Opening Trade Receivables | = | Rs. 37,000 |
| Closing Trade Receivables | = | Rs. 37,000 + 6,000 |
| = | Rs. 43,000 |
Balance Sheet: Meaning, Format & Examples
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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
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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