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

Question 91 Chapter 4 of +2-B
Question No. 91- Chapter No.4 - T.S. Grewal +2 Book Part B

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Question 91 Chapter 4 of +2-B

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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 RatioNet Credit Sales
Average Trade Receivable
3Rs. 4,00,000
Rs. 1,00,000
 =4 Times

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Case II :

Net Credit Sales=Total Sales −Cash Sales
 =Rs. 30,00,000 – Rs. 6,00,000
 =Rs. 24,00,000
Average Trade ReceivableOpening 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=25XRs.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=20XRs.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

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Case IV

Sales = X

Cash Sales=Xx20
100
 =  20x
    100

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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
XRs. 4,50,00,000
80
 =Rs. 5,62,000
Credit Sales=Y

 

Cash Sales=Yx20
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

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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)

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)

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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