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Question 89 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 89 Chapter 4 of +2-B
Question No. 89- Chapter No.4 - T.S. Grewal +2 Book Part B

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Question 89 Chapter 4 of +2-B

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Trade Receivables Turnover Ratio

89. Cash Revenue from Operations Cash Sales Rs. 2,00,000, Cost of Revenue from Operations or Cost of Goods Sold Rs. 3,50,000; Gross Profit Rs. 1,50,000; Trade Receivables Turnover Ratio 3 Times.
Calculate Opening and Closing Trade Receivables in each of the following alternative cases;
Case 1: If Closing Trade Receivables were Rs. 1,00,000 in excess of Opening Trade Receivables.
Case 2: If trade Receivables at the end were 3 times than in the beginning.
Case 3; If Trade Receivables at the end were 3 times more than that of in the beginning

 

The solution of Question 89 Chapter 4 of +2-B: –

Total Sales=Cost of Goods Sold + Gross Profit
 =Rs. 3,50,000 + Rs. 1,50,000
 =Rs. 5,00,000
Credit Sales=Total Sales − Cash Sales
 =Rs. 5,00,000 − Rs. 2,00,000
 =Rs. 3,00,000

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Trade Receivables Turnover RatioCredit Sales
Average Trade Receivable
3Rs. 3,00,000
Average Trade Receivable
 =Rs. 3,00,000
 3
Average Trade Receivable=Rs. 1,00,000
Opening Trade Receivables=X
Closing Trade Receivables=x + Rs. 1,00,000

 

Average Trade ReceivableOpening Trade Receivable + Closing Trade Receivable
2
Rs. 1,00,000X + (x+ Rs. 1,00,000)
2
Rs. 2,00,000=2x + Rs. 1,00,000
2x Rs. 2,00,000 – Rs. 1,00,000
2x Rs. 1,00,000
 =Rs. 1,00,000
  2
X=Rs. 50,000
Opening Trade Receivables=Rs. 50,000
Closing Trade Receivables=Rs. 50,000 + 1,00,000
 =Rs. 1,50,000

 

Opening Trade Receivables=X
Closing Trade Receivables=3x
Average Trade Receivable=Opening Trade Receivable + Closing Trade Receivable
2
Rs. 1,00,000=X + 3x
2
Rs. 2,00,000=4x
4x=Rs. 2,00,000
X=Rs. 2,00,000
  4
X=Rs. 50,000
Opening Trade Receivables=Rs. 50,000
Closing Trade Receivables=Rs. 50,000 X 3
 =Rs. 1,50,000

 

 

Opening Trade Receivables=X
Closing Trade Receivables=X + 3x
Average Trade Receivable=Opening Trade Receivable + Closing Trade Receivable
2
Rs. 1,00,000=x + (x + 3x)
2
Rs. 2,00,000=5x
4x=Rs. 2,00,000
X=Rs. 2,00,000
  5
X=Rs. 40,000
Opening Trade Receivables=Rs. 40,000
Closing Trade Receivables=Rs. 40,000 X 4
 =Rs. 1,60,000

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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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Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

Question 1 Chapter 1 of +2-B
T.S. Grewal’s Analysis of Financial Statements

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