Question 91 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 91 Chapter 4 of +2-B

Question 91 Chapter 4 of +2-B

Trade Receivables Turnover Ratio

91. Calculate Trade Receivables Turnover Ratio in each of the following
alternative cases:
Case 1: Net Credit Sales 4,00,000; Average Trade Receivables 1,00,000.
Case 2: Revenue from Operations Net Sales 30,00,000; Cash Revenue from
Operations, i.e., Cash Sales 6,00,000; Opening Trade Receivables
2,00,000; Closing Trade Receivables 6,00,000.
Case 3: Cost of Revenue from Operations or Cost of Goods Sold 3,00,000;
Gross Profit on Cost 25%; Cash Sales 20% of Total Sales; Opening
Trade Receivables 50,000; Closing Trade Receivables 1,00,000.
Case 4: Cost of Revenue from Operations or Cost of Goods Sold 4,50,000;
Gross Profit on Sales 20%; Cash Sales 25% of Net Credit Sales,
Opening Trade Receivables 90,000; Closing Trade Receivables 60,000.

 

The solution of Question 91 Chapter 4 of +2-B: –

Case I :

Trade Receivables Turnover Ratio Net Credit Sales
Average Trade Receivable
3 Rs. 4,00,000
Rs. 1,00,000
  = 4 Times

Case II :

Net Credit Sales = Total Sales −Cash Sales
  = Rs. 30,00,000 – Rs. 6,00,000
  = Rs. 24,00,000
Average Trade Receivable Opening Trade Receivable + Closing Trade Receivable
2
  Rs. 2,00,000 + Rs. 6,00,000
2
Trade Receivables Turnover Ratio = Net Credit Sales
    Average Trade Receivable
  = Rs. 24,00,000
Rs. 4,00,000
  = 6 Times

Case III :

Cost of Goods Sold = Rs. 3,00,000  
Gross Profit = 25% on Cost  
Gross Profit = 25 XRs.3,00,000
100
    Rs. 75,000  
  = Cost of Goods Sold + Gross Profit  
  = Rs. 3,00,000 + Rs. 75,000  
  = Rs. 3,75,000  
Cash Sales = 20% of Total Sales  
Gross Profit = 25% on Cost  
Cash Sales = 20 XRs.3,75,000
100  
  = Rs. 75,000  
Credit Sales = Total Sales − Cash Sales  
  = Rs. 3,75,000 – Rs. 75,000  
  = Rs. 3,00,000  

 

 

Average Trade Receivable = Opening Trade Receivable + Closing Trade Receivable
2
  = Rs. 50,000 + Rs. 1,00,000
2
  = Rs. 75,000
Trade Receivables Turnover Ratio = Net Credit Sales
Average Trade Receivable
X = Rs. 3,00,000
    Rs. 75,000
  = 4 Times

Case IV

Sales = X

Cash Sales = X x 20
100
  =     20x
        100

Sales = Cost of goods Sold + Gross Profit

X = 4,50,000 + 20x
100
X x 100 = Rs. 4,50,000 x 100 + 20x
100x = Rs. 4,50,00,000 + 20x
100x – 20x = Rs. 4,50,00,000
80x = Rs. 4,50,00,000
X Rs. 4,50,00,000
80
  = Rs. 5,62,000
Credit Sales = Y

 

Cash Sales = Y x 20
100
  =     20y
        100

Sales = Cash Sales + Credit Sales

Rs. 5,62,000 = 25y +y
100
Rs. 5,62,000 = 25y
100
Rs. 5,62,500X 100 = 125y
125y = Rs.5,62,50,000
  Rs. 5,62,50,000
125
  = Rs. 4,50,000
Average Trade Receivable = Opening Trade Receivable + Closing Trade Receivable
2
  = Rs. 90,000 + Rs. 60,000
2
  = Rs. 75,000
Trade Receivables Turnover Ratio = Net Credit Sales
Average Trade Receivable
X = Rs. 4,50,000
    Rs. 75,000
  = 4 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)

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 91 Chapter 4 of +2-B  - T.S. Grewal 12 Class
T.S. Grewal’s Analysis of Financial Statements

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