CameraIcon
CameraIcon
SearchIcon
MyQuestionIcon


Question

Calculate the amount of Opening Trade Receivables and Closing Trade Receivables from the following figures :

Trade Receivables Turnover Ratio 4 times

Cost of Revenue from Operations (Cost of Goods Sold) Rs. 6,40,000

Gross Profit Ratio 20%

Closing Trade Receivables were Rs. 20,000 more than at the beginning.

Cash Revenue from Operations being 33 13% of Credit Revenue from Operations.


Solution

Gross Profit                           
= 20% of Revenue from Operations

It means if Revenue from Operations (Sales) = Rs. 100

Gross Profit = Rs. 20

& Cost of Revenue from Operations = Rs. 80

If Cost of Revenue from Operations is Rs. 80,
Revenue from Operations is Rs. 100

If Cost of Revenue from Operations is Rs. 6,40,000
Revenue from Operations is 10080×Rs. 6,40,000 = Rs. 8,00,000

Total Revenue from Operations = Rs. 8,00,000

As Cash Revenue from Operations being 33 13% of Credit Revenue from Operations,

The Ratio of Cash Revenue from Operations and Credit

Revenue from Operations = 3313 % : 100 or 1 : 3 or 14:34

Credit Revenue from Operations = Rs. 8,00,000 ×34=Rs.6,00,000

Trade Receivable Turnover Ratio =Credit Revenue from OperationsAverage Trade Receivables

4 (Given)  = Rs. 6,00,000Average Trade Receivables

Average Trade Receivables  = Rs. 6,00,0004=Rs. 1,50,000

Opening Trade Receivables 
= Rs. 1,50,000 - 12 of Rs. 20,000
= Rs. 1,40,000

Closing Trade Receivables
= Rs. 1,50,000 + 12 of Rs. 20,000
= Rs. 1,60,000

flag
 Suggest corrections
thumbs-up
 
0 Upvotes


Similar questions
View More


People also searched for
View More



footer-image