Question

Credit Purchases Rs.6,00,000; Trade Payables Turnover Ratio 5 times. Calculate Closing Creditors, if Closing Creditors are Rs.10,000 less than Opening Creditors.

• A. Rs.1,15,000
• B. Rs.1,25,000
• C. Rs.1,30,000
• D. Rs.1,10,000

Hint:

Formula: \[ \text{Trade Payables Turnover Ratio} = \frac{\text{Credit Purchases}} {\text{Average Trade Payables}} \] and \[ \text{Average Trade Payables} = \frac{\text{Opening}+\text{Closing}}{2} \]

Answer 1

The Correct Option is B