Question 96:
` 3,00,000 is
the Cost of Revenue from Operations (Cost of Goods Sold).
Inventory Turnover Ratio 8 times; Inventory in the beginning is 2 times more
than the inventory at the end. Calculate value of Opening and Closing
Inventories
Answer:
Inventory tunover ratio= Cost of goods sold / Average Inventory
8=3,00,000/Average Inventory
Average Inventory=37,500
Let Closing Inventory = x
Opening Inventory = 2x + x = 3x
Average Inventory = Opening Inventory + Closing Inventory /2
37,500=3.5X+X/2
Or, 4X =75,000
Or, X =18,750
Closing Inventory = x = ` 18,750
Opening Inventory = 3x = 3 ×18,750 = ` 56,250
Trade Receivable Turnover Ratio
Question 97:
|
Credit Revenue from Operations, i.e., Net Credit Sales for the year |
1,20,000 |
|
Debtors |
12,000 |
|
Billls Receivable |
8,000 |
Calculate Trade Receivables Turnover Ratio.
Answer:
Trade receivable turnover ratio= Net sales/ Debtors+Bills receivable
Trade receivable turnover ratio= 1,20,000/12000+8,000=6 Times
Question 98:
Calculate Trade Receivables Turnover Ratio from the following information:
|
|
Opening Balance ( `) |
Closing Balance ( `) |
|
Sundry Debtors |
28,000 |
25,000 |
|
Bills Receivable |
7,000 |
15,000 |
|
Provision for Doubtful Debts |
2,800 |
2,500 |
Total Sales ` 1,00,000; Sales
Return ` 1,500; Cash
Sales ` 23,500.
Answer:
Net Credit Sales = Total Sales − Sales Return − Cash Sales
= 1,00,000 − 1,500 − 23,500 = 75,000
Average receivables= Opening Receivables +Closing Receivables/2
Average receivables= 28,000+7,000+25,000+15,000/2=37,500
Trade receivable turnover ratio= Net sales/ Average receivables
Trade receivable turnover ratio= 75,000/37,500 = 2 Times
Question 99:
Closing trade receivables `90,000, Revenue from operation `7,20,000, Cash Revenue from operation `1,80,000, Provision for Doubtful debts `8,000. Calculate Trade receivable turnover ratio.
Answers;
Trade receivable turnover ratio = Credit revenue from operation/ Average trade receivable
Trade receivable turnover ratio = 5,40,000/90,000 = 6 Times
Credit revenue from operations= Revenue from operations - Cash revenue from operation
5,40,000 = 7,20,000 – 1,80,000
Question 100:
Closing Trade Receivables ` 1,00,000; Cash Sales being 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables ` 40,000; Revenue from Operations, i.e., Net Sales ` 6,00,000. Calculate Trade Receivables Turnover Ratio.
Answer:
Let Credit Sales be = x
Cash Sales=x+25/100=25x/100
Total Sales = Cash Sales + Credit Sales
6,00,000=25x/100
Or, 125x/100=6,00,000
Or , x×6,00,000×100/125=4,80,000
Credit Sales = 4,80,000
Closing Trade Receivables = Opening Trade Receivables + 40,000
1,00,000 = Opening Trade Receivables + 40,000
Opening Trade Receivables = ` 60,000
Average receivables= Opening Receivables +Closing Receivables/2
Average receivables= 1,00,000+60,000/2=80,000
Trade receivable turnover ratio= Net sales/ Average receivables
Trade receivable turnover ratio= 4,80,000/80,000= 6 Times