Question

credit revenue from operations rs 4,00,000 trade receivables turnover ratio 5 calculate closing debtors if closing debtors are three times in comparison to opening debtors (a) 40,000 ( b )120000 ( c )160000 (d) 60000​

Answer 1

Answer:

Inventory Turnover Ratio 5 times; Cost of Revenue from Operations (Cost of ... Closing Inventory = 3.5 x = 3.5 × 1,68,000 = Rs 5, 88,000 ... Debtors at the end of year, 1,17,000, 83,000.

Answer 2

Answer:

( b )1,20,000

Closing debtor = 1,20,000

Explanation:

Given :

Credit revenue from operations = Rs 4,00,000

Trade receivables turnover ratio = 5

Closing debtors are three times in comparison to Opening debtors

To find :

Calculate closing debtors

Solution :

★ Trade receivables turnover ratio =

$\sf{Trade \: receivables \: turnover \: ratio = \dfrac{Credit \: revenue \: from \: operation}{Average \: trade \: receivable}}$

$\sf{5 = \dfrac{4,00,000}{Average \: Trade \: Receivable}}$

$\sf{Average \: Trade \: Receivable \: = \dfrac{400000}{5}}$

⇒ 80,000

Average trade receivable = 80,000

Let,

Opening debtor = x

Closing debtor = 3x

★ Average trade receivable =

⇒ (Opening debtor + Closing debtor) / 2

$\sf{80000 = \dfrac{x + 3x}{2}}$

$\sf{80000 = \dfrac{4x}{2}}$

⇒ 4x = 1,60,000

⇒ x = 1,60,000 / 4

⇒ x = 40,000

Opening debtor = 40,000

Closing debtor = 3x

⇒ 3 (40,000)

⇒ 1,20,000

Closing debtor = 1,20,000