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Calculate amount of Opening Trade Receivables and Closing Trade Receivables from the following figures: Trade Receivable Turnover ratio 5 times Cost of Revenue from Operations ₹ 8,00,000 Gross Profit ratio 20% Closing Trade Receivables were ₹ 40,000 more than in the beginning Cash sales being ¼ times of Credit sales?
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Calculate amount of Opening Trade Receivables and Closing Trade Receiv...
Calculation of Opening and Closing Trade Receivables:


  1. Calculate Credit Sales


    • Cash sales = 1/4 of Credit sales

    • Let Cash sales be x

    • Therefore, Credit sales = 4x



  2. Calculate Gross Profit


    • Gross Profit = Cost of Revenue from Operations x Gross Profit ratio

    • Gross Profit = ₹ 8,00,000 x 20%

    • Gross Profit = ₹ 1,60,000



  3. Calculate Trade Receivable


    • Trade Receivable = Credit Sales x Trade Receivable Turnover Ratio

    • Trade Receivable = 4x x 5

    • Trade Receivable = 20x



  4. Calculate Closing Trade Receivable


    • Closing Trade Receivable = Opening Trade Receivable + Credit Sales - Cash Sales

    • Closing Trade Receivable = Opening Trade Receivable + 4x - x

    • Closing Trade Receivable = Opening Trade Receivable + 3x



  5. Calculate Difference between Opening and Closing Trade Receivables


    • Closing Trade Receivable - Opening Trade Receivable = ₹ 40,000

    • Opening Trade Receivable + 3x - Opening Trade Receivable = ₹ 40,000

    • 3x = ₹ 40,000

    • x = ₹ 13,333.33



  6. Calculate Opening Trade Receivable


    • 20x - Closing Trade Receivable = Opening Trade Receivable

    • (20 x ₹ 13,333.33) - (Opening Trade Receivable + 3 x ₹ 13,333.33) = Opening Trade Receivable

    • Opening Trade Receivable = ₹ 46,666.67



  7. Calculate Closing Trade Receivable


    • Closing Trade Receivable = Opening Trade Receivable + 4x - x

    • Closing Trade Receivable = ₹ 46,666.67 + 3 x ₹ 13,333.33

    • Closing Trade Receivable = ₹ 93,333.33




Explanation:

The Trade Receivable Turnover ratio is used to calculate the amount of credit sales. The Gross Profit ratio is used to calculate the gross profit. The amount of opening trade receivables is calculated by subtracting the closing trade receivables from the total trade receivables. The closing trade receivables are calculated by adding the credit sales and subtracting the cash sales and the difference between the opening and closing trade receivables is given. The opening trade receivables are calculated by using the formula: Closing Trade Receivable - (Credit Sales x Trade Receivable Turnover Ratio). Finally, the closing trade receivables are calculated by adding the opening trade receivables, credit sales, and subtracting the cash sales.
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Calculate amount of Opening Trade Receivables and Closing Trade Receiv...
Calculate amount of Opening Trade Receivables and Closing Trade Receivables from

the following figures: Trade Receivable Turnover ratio 5 times Cost of Revenue from Operations 8,00,000 Gross Profit ratio 20% Closing Trade Receivables were 40,000 more than in the beginning Cash sales being times of Credit sales
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Calculate amount of Opening Trade Receivables and Closing Trade Receivables from the following figures: Trade Receivable Turnover ratio 5 times Cost of Revenue from Operations ₹ 8,00,000 Gross Profit ratio 20% Closing Trade Receivables were ₹ 40,000 more than in the beginning Cash sales being ¼ times of Credit sales?
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Calculate amount of Opening Trade Receivables and Closing Trade Receivables from the following figures: Trade Receivable Turnover ratio 5 times Cost of Revenue from Operations ₹ 8,00,000 Gross Profit ratio 20% Closing Trade Receivables were ₹ 40,000 more than in the beginning Cash sales being ¼ times of Credit sales? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Calculate amount of Opening Trade Receivables and Closing Trade Receivables from the following figures: Trade Receivable Turnover ratio 5 times Cost of Revenue from Operations ₹ 8,00,000 Gross Profit ratio 20% Closing Trade Receivables were ₹ 40,000 more than in the beginning Cash sales being ¼ times of Credit sales? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Calculate amount of Opening Trade Receivables and Closing Trade Receivables from the following figures: Trade Receivable Turnover ratio 5 times Cost of Revenue from Operations ₹ 8,00,000 Gross Profit ratio 20% Closing Trade Receivables were ₹ 40,000 more than in the beginning Cash sales being ¼ times of Credit sales?.
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