Question 96:
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 97:
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 98:
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
Question 99:
Compute Trade Receivables Turnover Ratio from the following:
|
|
31st March, 2022(₹) |
31st March, 2023(₹) |
|
Revenue from Operations (Net Sales) |
8,00,000 |
7,00,000 |
|
Debtors in the beginning of year |
83,000 |
1,17,000 |
|
Debtors at the end of year |
1,17,000 |
83,000 |
|
Sales Return |
1,00,000 |
50,000 |
Answer:
Average Debtors =Opening Debtors + Closing Debtors/2
In 2022 = 83,000 + 1,17,000/2 = ₹1,00,000
In 2023 =1,17,000 + 83,000/2 = ₹1,00,000
Debtors Turnover Ratio = Net Sales/Average Debtors
In 2022 = 8,00,000/1,00,000 = 8 Times
In 2023= 7,00,000/1,00,000 = 7 Times
Question 100:
Closing Trade Receivables ₹1,20,000, Revenue from Operations ₹14,40,000. Provision for Doubtful Debts ₹20,000. Calculate Trade Receivables Turnover Ratio.
Answer:
Closing Trade Receivables = ₹1,20,000
Revenue from Operations = ₹14,40,000
Since, opening trade receivables have not been given we assume closing trade
receivables to be our average trade receivables.
Also, the revenue from operations will be assumed to be
revenue from net credit sales.
Trade Receivables Turnover Ratio = Credit Revenue from
Operations/Average Credit receivables
= 14,40,000/1,20,000 = 12 times
Therefore, this higher ratio indicates the rate at which the firm is able
to collect its debt efficiently.
Ts Grewal Solution 2026-2027
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Class 12 / Volume – III
Chapter 4 – Accounting Ratios