CBSE 2025, Set 1

Question

(a) Calculate opening and closing Trade Payables from the following information:
Total purchases ₹ 15,00,000;
Cash purchases are 25% of credit purchases;
Trade payables turnover ratio is 4 times;
Closing trade payables are two times of opening trade payables.

Edvaya · Accepted Answer

The correct answer is Subjective. **Step 1: Find Credit Purchases** Total purchases = Cash purchases + Credit purchases 15,00,000 = 25% of Credit purchases + Credit purchases 15,00,000 = 1.25 × Credit Purchases Credit purchases = 15,00,000 / 1.25 = ₹ 12,00,000. **Step 2: Find Average Trade Payables** Trade payables turnover ratio = Net Credit purchases / Average Trade Payables 4 = 12,00,000 / Average Trade Payables Average Trade Payables = ₹ 3,00,000. **Step 3: Find Opening and Closing Trade Payables** Average Trade Payables = (Opening + Closing) / 2 Let Opening Trade Payables be $x$. Closing Trade Payables = $2x$. 3,00,000 = ($x$ + $2x$) / 2 6,00,000 = $3x$ $x$ = ₹ 2,00,000. **Answer:** Opening Trade Payables = **₹ 2,00,000**. Closing Trade Payables = **₹ 4,00,000**.

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Accountancy > Financial Statements Analysis > Accounting Ratios

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