Question

Calculate debtors turnover ratio from the following: total sales for the year rs.6,00,000; credit sales: 70% of total sales; Sales Returns (4/5th out of Credit Sales) Rs.25,000; Opening Debtors Rs.36,625; Closing Debtors Rs.43,375. Solve this question

Answer 1

Answer:

Credit Sales = 3,00,000

Cash sales = 25% of Credit Sales

Total Sales = Cash Sales + Credit Sales

= 3,00,000 + 75,000 = 3,75,000

Gross Profit = 20% on Sales

Cost of Goods Sold = Total Sales − Gross Profit

= 3,75,000 − 75,000 = 3,00,000