108 :- From the following information, calculate Opening and Closing Trade Receivables, if Trade Receivables Turnover Ratio is 3 times :
(a) Cash Revenue from Operations is 1/3rd of Credit Revenue from Operations.
(b) Cost of Revenue from Operations is Rs 3,00,000.
(c) Gross Profit is 25% of the Revenue from Operations.
(d) Trade Receivables at the end are 3 times more than that of in the beginning.
Solution :-
Gross Profit = Net Sales – Cost of Goods Sold
25x/100 = x – 3,00,000
3,00,000 = 75x/100
x = 3,00,000 x 100/75
Net Revenue from Operations (x) = Rs 4,00,000
Let Cash Sales be x
Net Revenue from Operations = Cash Sales + Credit Sales
4,00,000 = x/3 + x
4,00,000 = 4x/3
x = 4,00,000 x 3/4
Net Credit Revenue from Operations (x) = Rs 3,00,000
Let the Opening Trade Receivables be x
Closing Trade Receivables = x + 3x
Trade Receivable Turnover Ratio = Net Credit Revenue from Operations/Average Trade Receivables
3 = 3,00,000/(4x + x)/2
3 = 3,00,000 x 2/5x
x = 1,20,000/3
Opening Trade Receivables (x) = Rs 40,000
Closing Trade Receivables = 40,000 x 4
= Rs 1,60,000