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12th | Accounting Ratios | Question No. 96 To 100 | Ts Grewal Solution 2022-2023

Question 96:


Calculate Trade Payables Turnover Ratio and Average Debt payment Period from the following information:
 

 

1st April, 2020
 `

31st March, 2021
 `

Sundry Creditors

1,50,000

4,50,000

Bills Payable

50,000

1,50,000


Total Purchases  ` 21,00,000; Purchases Return
 ` 1,00,000; Cash Purchases  ` 4,00,000.

Answer:


Average Trade Payables 

=  Opening Creditors & B/P + Closing Creditors & B/P÷2

 

=  1,50,000 + 50,000 + 4,50,000 + 1,50,000÷2

 

 ` 4,00,000

 

Net Credit Purchases 

=  Total Purchases - Purchases Return - Cash Purchases

 

=  21,00,000 - 1,00,000 - 4,00,000 =  ` 16,00,000

 

Trade Payables Turnover Ratio 

=  Net Credit Purchases /  Average Trade Payables 

=  16,00,000/4,00,000 = 4 times

 

Average Debt Payment Period 

=  12 Trade Payable Turnover Ratio

 

=  12/4 

=  3 months

Question 97:


Calculate Trade payables Turnover Ratio from the following information:
Opening Creditors 
` 1,25,000; Opening Bills Payable  ` 10,000; Closing Creditors  ` 90,000; Closing bills Payable  ` 5,000; Purchases  ` 9,50,000; Cash Purchases  ` 1,00,000; Purchases Return  ` 45,000.

Answer:


Net Credit Purchases = Purchases – Cash Purchases – Purchase Return
                                  =
 ` 9,50,000 –  ` 1,00,000 –  ` 45,000 =  ` 8,05,000

Average Trade Payables 

=  Opening Creditors & Bills payables + Closing Creditors & Bills payables / 2

 

=  1,25,000 + 10,000 + 90,000 +5,000/2

 

 ` 1,15,000

 

Trade Payables turnover ratio

=  8,05,000/115000 

 

=  7 Times

 

Question 98:


Calculate Trade Payables Turnover Ratio for the year 2020-21 in each of the alternative cases:
Case 1 : Closing Trade Payables 
` 45,000; Net Purchases  ` 3,60,000; Purchases Return  ` 60,000; Cash Purchases  ` 90,000.
Case 2 : Opening Trade Payables 
` 15,000; Closing Trade Payables  ` 45,000; Net Purchases  ` 3,60,000. 
Case 3 : Closing Trade Payables 
` 45,000; Net Purchases  ` 3,60,000.
Case 4 : Closing Trade Payables (including 
` 25,000 due to a supplier of machinery)  ` 55,000; Net Credit Purchases  ` 3,60,000.

Answer:


Case 1

Net Credit Purchases = Net Purchases − Cash Purchases

= 3,60,000 − 90,000

= 2,70,000

Trade Payables Turnover Ratio = Net Credit Purchases/Closing Trade Payables                                     

= 2,70,000/45,000 

= 6 times

Case 2

Net Purchases = 3,60,000
Average Trade Payables = Opening Trade Payables + Closing Trade Payables/2                                                     

= 15,000 + 45,000/2 = 30,000

Trade Payables Turnover Ratio = Net Credit Purchases/Average Trade Payables  

= 3,60,000/30,000 = 12 times

Case 3

Trade Payable Turnover Ratio = Net Credit Purchases/Closing Trade Payables 

= 3,60,000/45,000 

= 8 times

Case 4

Net Credit Payables for Goods = Trade Payables − Creditors for Machinery

= 55,000 − 25,000

= 30,000

Trade Payables Turnover Ratio = Net Credit Purchases/Average Trade Payables 

= 3,60,000/30,000 

= 12 times

 

Question 99:


Closing Trade Payables `5,40,000, Net purchases `43,20,000, Cash purchases `10,80,000. Calculate Trade Payables Turnover Ratio 

Answers;


Trade payable turnover ratio= credit purchases/ average trade payable

Trade payable turnover ratio =32,40,000 / 5,40,000= 6 Times

Credit purchases= net purchases - cash purchases

32,40,000 = 43,20,000- 10,80,000     

Question 100:


From the following information, calculate Opening and Closing trade payable:
Cash purchases 25% of total Purchases, Revenue from operation
`3,00,000, Gross profit 25% on revenue from Operations, Opening Inventory ` 75,00,000, Closing Inventory  `150,000, Trade Payables turnover Ratio 3 times, Closing Trade Payables were `75,000 in excess of opening trade payables

Answers;


1

Cost of revenue from operation

= revenue from operation - gross profit

 

 

=3,00,000 -( 25% of revenue from operations)

= 3,00,000 -( 25% of 3,00,000)

= 3,00,000 - 75,000

 

Cost of revenue from operation

=2,25,000

 

 

 

2.

 

Total purchases

 

Total purchases

= cost of revenue + closing inventory - opening inventory

= 25,000 + 15,0000 - 75,000

= 3,00,000

 

 

 

3.

 

Net credit purchases

= total purchases - Cash purchases

= 3,00,000 - 25% of 3,00,000

    3,00,000 - 75,000

 

Net credit purchases

= 2,25,000

 

 

 

4.

Trade payable turnover ratio

3

3x + 3 X + 2,25,000

6x + 2,25,000

6x =

X =

X=

Closing trade payables =

= net credit purchases / average trade payable

= 225,000/ X + X + 7500/2

= 4,50,000

= 4,50,000

4,50,000 -2,25,000

2,25,000/6

37,500 (Opening trade payable)

37,500 + 75,000= 1,12,500

 

 

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