Solutions to
Text Book Exercises
Chapter – 2
AVERAGE DUE DATE
1. Calculation of Average Due Date with any Date :
Solution – 1 :
(a) If the first date is taken as Starting Date :
Calculation of Average Due Date
Starting Date : March 4th, 2003
th
Due Date Amount No. of days from Marth 4 to the due date Product
2003 Rs.
March 4 2,000 0 0
April 23 3,200 50 (27 + 23) 1,60,000
May 1 800 58 (27 + 30 + 1) 46,400
May 15 4,000 72 (27 + 30 + 15) 2,88,000
July 31 10,000 149 (27 + 30 + 31 + 30 + 31) 14,90,000
20,000 19,84,400
Average Due Date = Starting Date + Total Products
Total Amount
Total Products = 19,84,400; Total Amount Rs.20,000
Average Due Date = March 4, 2003 + 19,84,400
20,000
= March 4th, 2003 + 99 days (approx.) = June 11th, 2003
Average Due Date = June 11th, 2003
Working Notes : Calculation of 99 days from Marth 4th
Days to be calculated from Starting Date 99
Days remained in March 27
72
Days in April Month 30
42
2
Days in May month 31
Days in June Month 11
(b) If last date is taken as Starting Date :
If the last date is taken as Starting date let us now calculate the average due date
with the example given below
Calculation of Average Due Date
Starting Date : July 31st, 2003
Due Date Amount No. of days from July 31st to the due Product
date
2003 Rs.
March 4 2,000 - 149 - 2,98,000
April 23 3,200 - 99 - 3,16,800
May 1 800 - 91 - 72,800
May 15 4,000 - 77 - 3,08,000
July 31 10,000 0 0
20,000 - 9,95,600
Average Due Date = Starting Date + Total Products
Total Amount
Total Products = (-) 9,95,600; Total Amount Rs.20,000
Average Due Date = July 31st, 2003 + - 9,95,600
20,000
= July 31st, 2003 - 50 days (approx.) = June 11th, 2003
Average Due Date = June 11th, 2003
Working Notes : Calculation of 50 days from July 31st
Prior days from the Starting date 50
Less : Days remained in July 31
Less : Days to be deducted in June 19
(c) If the middle date is taken as starting date :
Instead of taking the first date or the last date let us take the middle date as
starting date and workout the average due date with the same illustration given below.
Calculation of Average Due Date
Starting Date : May 1st, 2003
Due Date Amount No. of days from July 31st to the due Product
date
2003 Rs.
March 4 2,000 - 58 - 1,16,000
April 23 3,200 -8 - 25,600
May 1 800 0 0
May 15 4,000 + 14 56,000
July 31 10,000 + 91 9,10,000
20,000 8,24,400
Average Due Date = Starting Date + Total Products
Total Amount
Total Products = 8,24,400; Total Amount Rs.20,000
Average Due Date = May 1, 2003 + 8,24,400
20,000
= May 1st, 2003 + 41 days (approx.) = June 11th, 2003
Average Due Date = June 11th, 2003
Note :
1. From the above we can note, whatever may be the starting date, the final answer is
same, i.e., June 11th, 2003.
2. While counting days we have to leave either the first date or the last date.
Solution – 2 :
Calculation of Average Due Date
Starting Date : July 18th, 2003
Due Date Amount No. of days from starting date to the due Product
date
2003 Rs.
July 18 300 0 0
Sept.22 350 66 (13 + 31 + 22) 23,100
Oct.12 250 86 (13 + 31 + 30 + 12) 21,500
Nov.24 200 129 (13 + 31+30 + 31 + 24) 25,800
1,100 70,400
Average Due Date = Starting Date + Total Products
Total Amount
= July 18 + 70,400
1,100
= July 18 + 64 days = September 20, 2003
4
Average Due Date = September 20th, 2003
Solution – 3 :
Calculation of Average Due Date
Starting Date : January 7th
Due Date Amount No. of days from starting date to the due Product
date
Rs.
Jan. 7 2,500 0 0
Feb.20 1,500 44 66,000
Ap.4 2,000 87 1,74,000
May 12 1,000 125 1,25,000
7,000 3,65,000
Average Due Date = Starting Date + Total Products
Total Amount
= January 7th + 3,65,000
7,000
= January 7th + 52 days = February, 28
Average Due Date = February 28
Solution – 4 :
Calculation of Average Due Date
Starting Date : April 3
Due Date Amount No. of days from the starting date to due Product
date
Rs.
April 3 1,200 0 0
May 6 3,000 33 (27 + 6) 99,000
May 18 2,500 45 (27 + 18) 1,12,500
June 8 2,400 66 (27 + 31 + 8) 1,58,400
July 20 4,000 108 (27 + 31 + 30 + 20) 4,32,000
13,100 8,01,900
Average Due Date = Starting Date + Total Products
Total Amount
= April 3 + 8,01,900
13,100
= April 3+ 61 days = June 3
Average Due Date = June 3
2. When date of Bill and Due Date is given :
Solution – 5 :
Calculation of Average Due Date
Starting Date : July 18th, 2003
Due Date Amount No. of days from the starting date to due Product
date
2004 Rs.
April 4 1,000 0 0
June 4 500 61 30,500
July 8 1,500 95 1,42,500
October 8 2,000 187 3,74,000
5,000 5,47,000
Average Due Date = Starting Date + Total Products
Total Amount
= April 4 + 5,47,000
5,000
= April 4 + 109 days = July 22, 2004
Average Due Date = July 22nd, 2004
Working Days :
1. No. of days from April 4th to June 4th = 26 + 31 + 4 = 61
2. No. of days from April 4th to July 8th = 26+ 31 + 30 + 8 = 95
3. No. of days from April 4th to October 8th = 26 + 31 + 30 + 31 + 31 + 30 + 8 = 187,.
4. Date arrived at by adding 109 days to April 4th = July 22, 2004.
3. When Date of Bill and Bill period is given :
6
Solution – 6
Calculation of Average Due Date
Starting Date : April 13th, 1999
Due Date Amount No. of days from the starting date to due Product
date
1999 Rs.
April 13 800 0 0
April 18 1,000 5 5,000
May 13 400 30 12,000
May 8 600 25 15,000
2,800 32,000
Average Due Date = Starting Date + Total Products
Total Amount
= April 13 + 32,000
2,800
= April 13 + 11 days = April 24, 1999
Average Due Date = April 24th, 1999
4. When due date falls on public holiday or unexpected
holiday :
Solution – 7 :
Calculation of Average Due Date
Starting Date : January 10th, 2002
Normal Actual Due Amount No. of days from the starting Product
Due Date Date date to due date
2002 Rs.
Jan.10 Jan.10 500 0 0
Jan.26 Jan.25 1,000 15 15,000
Mar.23 Mar.23 3,000 72 2,16,000
Aug.18 Aug.17 4,000 219 8,76,000
8,500 11,07,000
Average Due Date = Starting Date + Total Products
Total Amount
= January 10 + 11,07,000
8,500
= 130 days = May 20, 2002
Average Due Date = May 20th, 2002
Note : Since Republic day and Sunday are public holidays the previous working days to
those days should be taken as due date.
Solution – 8 :
Calculation of Average Due Date
Starting Date : February 13th, 2004
Due Date Amount No. of days from the starting date to due Product
date
2004 Rs.
Feb.13 600 0 0
April 18 1,000 65 65,000
May 28 1,500 105 1,57,500
July 23 500 161 80,500
3,600 3,03,000
Average Due Date = Starting Date + Total Products
Total Amount
= February 13 + 3,03,000
3,600
= February 13 + 84 days = May 7th, 2004
Average Due Date = May 7th, 2004
Note : 2004 is a leap year.
5. When Interest is to be calculated :
Solution – 9 :
Calculation of Average Due Date
Starting Date : March 13th, 2004
Due Date Amount No. of days from the starting date to due Product
date
2004 Rs.
Mar.13 2,000 0 0
April 23 4,000 41 1,64,000
May 3 6,000 51 3,06,000
12,000 4,70,000
Average Due Date = Starting Date + Total Products
8
Total Amount
= March 13 + 4,70,000
12,000
= March 13 + 39 days = April 21, 2004
Average Due Date = April 21st, 2004
Calculation of Interest :
Interest = PNR
100
Average Due Date = April 21, 2004
Interest is to be calculated upto June 30th, 2004
No.of days from April 21st to June 30th = 70
Drawings : Rs.12,000; Interest Rate = 10%;
Interest = Rs.12,000 X 10/100 X 70/366 = Rs.229.50
6. When interest on partner’s drawings is to be
calculated :
Solution – 10 :
Calculation of Average Due Date
Starting Date : January 15th, 2003
Due Date Amount No. of days from Marth 4th to the due date Product
2003 Rs.
Jan.15 200 0 0
Feb.18 250 34 8,500
Mar.19 300 63 18,900
April 14 250 89 22,250
May 18 100 123 12,300
June 14 200 150 30,000
1,300 91,950
Average Due Date = Starting Date + Total Products
Total Amount
= January 15 + 91,950
1,300
= January 15 + 71 days = March 27, 2003
Average Due Date = March 27th, 2003
Calculation of Interest :
Interest = PNR
100
Average Due Date = March 27, 2003
Interest is to be calculated upto June 30th,
No.of days from March 27th to June 30th = 95
Drawings : Rs.1,300; Interest Rate = 5%;
Interest = Rs.1,300 X 5/100 X 95/365 = Rs.16.92
Solution – 11 :
When Bills are drawn on the same date instead of calculating the due date of
each bill, average due date can be calculated in the following way.
Amount Due Period Product
(1) Rs. (2) [1 x 2]
4,000 1 month 4,000
5,000 2 months 10,000
3,000 5 months 15,000
2,000 3 months 6,000
14,000 35,000
Average due period = Total Products
Total Amount
= 35,000
14,000 = 2.5 months or 2 months 15 days.
Average due date = Date of bill drawn + Due period + Grace days 3
= January 1st, 2004 + 2 months 15 days + 3 grace days = March 18
Average Due Date = March 18, 2004.
10
7. Repayment in various installments :
Solution – 12 :
Average Due date = D + SDP
N
Where,
D = Date of lending
SDP = Sum of Days (months or years) from the date of lending to the date of
repayment of each installment.
N = Number of installments.
Average Due Date = April 1st, 2003 + (1 + 2 + 3 + 4+5)
5
= April 1st, 2003 + 3 years = April 1st, 2006
Average Due Date = April 1st, 2006
Solution – 13 :
Average Due date = D + SDP
N
Where,
D = Date of lending
SDP = Sum of Days (months or years) from the date of lending to the date of
repayment of each installment.
N = Number of installments.
Average Due Date = January 1st, 2000 + (1 + 2 + 3 + 4 + 5)
5
= January 1, 2000 + 3 years = January 1, 2003
Average Due Date = January 1st, 2003
Calculation of Interest :
Interest is to be calculated for three years
Interest = Rs.20,000 X 12/100 x 3 = Rs.7,200
