Page No
4.115:
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.
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
|
page No 4.115:
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.
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
Page No
4.115:
Question
103:
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
Page No
4.115:
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
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 |
Page No 4.115:
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
Answer:
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
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