12th | Ts grewal 2021-2022 Question 101 to 105 | ch:4 Accounting Ratios

Question 101:

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.

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

Question 102:

Calculate Trade Payables Turnover Ratio for the year 2018-19 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.

Case 1

Net Credit Purchases = Net Purchases − Cash Purchases

= 3,60,000 − 90,000

= 2,70,000

= 2,70,000/45,000

= 6 times

Case 2

Net Purchases = 3,60,000

= 15,000 + 45,000/2 = 30,000

= 3,60,000/30,000 = 12 times

Case 3

= 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

= 3,60,000/30,000

= 12 times

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

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 104:

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

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.

3

3x + 3 X + 2,25,000

6x + 2,25,000

6x =

X =

X=

= 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 + 75,000= 1,12,500

Question 105:

Calculate Working Capital Turnover Ratio from the following information;

Revenue from Operations (Cost of Goods Sold) 24,00,000

Current Assets 10,00,000

Current Liabilities 4,00,000

Working Capital = Current Assets - Current Liabilities

Working Capital = 10,00,000 – 4,00,000

Working Capital = 6,00,000

Working Capital Turnover Ratio = Revenue from operation/ Working Capital

Working Capital Turnover Ratio = 24,00,000/ 6,00,000

Working Capital Turnover Ratio = 4 Times