Question 88 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 88 Chapter 4 of +2-B

Question 88 Chapter 4 of +2-B

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

 

(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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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)

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

2 Book 3 min 225x300 - Question 88 Chapter 4 of +2-B  - T.S. Grewal 12 Class
T.S. Grewal’s Analysis of Financial Statements

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