Question

Compute the Net credit Sales if Opening account receivables

are Rs.25,000 and closing account receivables are three times

the opening and Trade Receivable Turnover Ratio is 4 Times.​

Answer 1

Answer:

hope it will help you

Explanation:

Average debtors = (Rs. 40,000 + Rs. 1,20,000)/2 = Rs. 80,000

Cash sales = 20% of total sales

= Rs. 4,00,000 x 20%

= Rs. 80,000

Net credit sales = Total sales - Cash sales

= Rs. 4,00,000 - Rs. 80,000

= Rs. 3,20,000

Debtors turnover ratio = Net credit sales/Average debtors

= Rs. 3,20,000/Rs. 80,000

= 4 Times

Answer 2

Answer:

Net Credit Sales = Rs 2,00,000

Rs 2,00,000Explanation:

Given :

• Opening account receivables = Rs.25,000

• Closing account receivables = Three Times Opening account receivables

• Trade Receivable Turnover Ratio is 4 Times

To find :

• The Net credit Sales

Solution :

Opening account receivables = Rs.25,000

Closing account receivables = Three Times Opening account receivables

25,000 × 3 = 75,000

Closing account receivables = Rs 75,000

Trade Receivable Turnover Ratio = Net Credit Sales / Average Trade Receivables

Trade Receivable Turnover Ratio =

$\longrightarrow{\sf{\dfrac{Net \: Credit \: Sales}{Average \: Trade \: Receivables}}}$

$\longrightarrow{\sf{4 \: = \: \dfrac{Net \: Credit \: Sales}{\frac{25000 \: + \: 75000}{2}}}}$

$\sf{\longrightarrow{4 \: = \: \dfrac{Net \: Credit \: Sales}{ \frac{100000}{2}}}}$

$\longrightarrow{\sf{4 \: = \: \dfrac{Net \: Credit \: Sales}{50000}}}$

$\longrightarrow$ Net Credit Sales = 50,000 × 4

$\longrightarrow$ 2,00,000

Net Credit Sales = Rs 2,00,000

∴ Net Credit Sales = Rs 2,00,000