Net sales ‘pebtors at the beginning [Debtors at the end [Bharathidasan B.Com TAns: (a), 2004: 9,04 times: 2005: 8.97 times; (©), 2004: 40 days; 2005: 41 daym ; {e iloning information as bon exacted om he recade of the company for 2003 2004 Net sales Rs. 25,00,000 __Rs.33,00,000 Receivables Rs. 5,00,000 _Rs.5,50,000 Calculate receivables tumover for the given two years, Find out average size of investment in receivables for an improved receivables ~ tumover of 6 5 times on budgeted sales volume of Rs. 39,00,000 for the year 2005. [Bharathidesan B.Com] [Ans: Receivables turnover: 2003:5 times (25,00,000/S,00,000) 2004: 6 times (33,00,000/5,50,000) Investment in receivables (2005): Rs. 6,00,000 (39,00,0006.5)1 per Star Lid. decides to liberalise credit to increase its sales. The liberalised ‘policy will bring additional sales of Rs, 3,00,000. The variable cost will be ‘of sales and there will be 10% risk for non-payment and 5% collection cost. il the company benefit from the new credit policy? ([Bharathidasan B.Com] ‘{fAns: Increase in profit Rs.75,000 (3,00,000 — 1,80,000 — 30,000 — 15,000) Nano Lid, has credit sales amounting to Rs. 32,00,000. The sale price per unit is , 40, The variable cost is Rs.25 per unit while the average cost per unit is Rs. 32 le average age of receivables of the firm is 72 days. he firm is considering to tighten the credit standards. It will result in a fall im to Rs, 28,00,000 and the average age of accounts receivables to 45 days. sme 360 days in a year and required rate of return is 20%, Is the proposal ‘consideration feasible? [Ans: Profit: Present policy: Rs. 5,37,600 (32,00,008 — 20,00,000 — 5,60,000 — 1,02,408, Proposed policy: Rs. 4,32,250 (28,00,001 ~ 17,50,000 ~ 5,60,000-57,750) YYcy Calculate the debtors turnover ratio and average age of del data: Rs. Cash sales 6,00,000 Total sales 12,00,000 Bills receivable (1.1.98) 45,000 Bills receivable (31.12.08) 55,000 Debtors at th Debtors (1.1.08) 80,000 Debtors (31.12.08) 1,20,000 Assume 360 days ina year 7. te following i last two yea 4. Calculate A Sige wt in wr et sa Credit sales Rs, Retum inward 1,85,000 @ Calculate re Debtors at the beoinn:- 9 fansa axe saejnoned BujMo}}O} MY ‘NPA UO \s9cx oo'oe'1/000'0T 91) sXe 97 = P 00°21 “Sa 000'8 “Sa 00°01 “SH sates yen Jo 1402 7 AMISare credit terms? Explain the role of credit do you mean by credit analysis? “te a short note on collection policy, is average collection period? How is it determined? ye the meaning of the term ageing schedule, ‘ EXERCISE : som the following information, you are required to calculate dane “Tote! sales for the year Rs. 175,000 * mr . terms ina credit poi