Question
What does too high 'Trade Receivables Turnover Ratio' indicate?
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Answer
Normally, a high trade receivables turnover ratio indicates the prompt payments by trade receivables but a too high ratio may be the result of restrictive credit and collection policy of the management which may curtail the sales and hence may adversely affect the profit.
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Nikhil and Ashwin Limited bought business of Agarwal Limited consisting sundry assets of ₹ 3,60,000, sundry creditors ₹ 1,00,000 for a consideration of ₹ 3,07,200. It issued 14% debentures of ₹ 100 each fully paid at a discount of 4% in satisfaction of purchase consideration. Record necessary journal entries.
Give journal entries in each of the following cases if the face value of a debenture is ₹ 100:
- A debenture issued at ₹ 105 repayable at ₹ 100.
- A debenture issued at ₹ 100 repayable at ₹ 105.
- A debenture issued at ₹ 110 repayable at ₹ 105.
S.S.C. Ltd. has a paid up share capital of ₹ 60,00,000 and a balance of ₹ 15,00,000 in Securities Premium. Account The company management do not want to carry over the balance. State the purposes for which the balance can be utilised.
Calculate Inventory Turnover Ratio from the data given below:
State the significance of this ratio.
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₹
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₹
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Inventory in the beginning of the year.
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20,000
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Carriage Inwards.
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5,000
|
|
Inventory at the end of the year.
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10,000
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Revenue from Operations, i.e., Sales.
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1,00,000
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Purchases.
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50,000
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|
|
The authorised capital of ₹ 16,00,000 of XYZ Ltd. is divide into 1,60,000 Equity Shares of ₹ 10 each. Out of these shares, 80,000 Equity Shares were issued at par to public for subscription. The full nominal value is payable on application. All the shares were subscribed by the public and total amount was paid for. Pass necessary journal entries in the books of the company.
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Give journal entries in the books of Wye Ltd.
Give journal entries in the books of Wye Ltd.
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