Question
From the following particulars determine the Opening Trade Receivables:
✓
Answer
Trade Receivables Turnover Ratio $=\frac{\text{Credit Revenue from Operations}}{\text{Average Trade Receivables}}$
$12=\frac{₹\ 4,32,000}{\text{Average Trade Receivables}}$
$\therefore$ Average Trade Receivables $=\frac{₹\ 4,32,000}{12}=₹\ 36,000$
Calculation of Closing Trade Receivables:
Opening Trade Receivables + Closing Trade Receivables
= Average Trade Receivables × 2
= ₹ 36,000 × 2 = ₹ 72,000
As Closing Trade Receivables are ₹ 40,000, therefore
Opening Trade Receivables= ₹ 72,000- ₹ 40,000 = ₹ 32,000
$12=\frac{₹\ 4,32,000}{\text{Average Trade Receivables}}$
$\therefore$ Average Trade Receivables $=\frac{₹\ 4,32,000}{12}=₹\ 36,000$
Calculation of Closing Trade Receivables:
Opening Trade Receivables + Closing Trade Receivables
= Average Trade Receivables × 2
= ₹ 36,000 × 2 = ₹ 72,000
As Closing Trade Receivables are ₹ 40,000, therefore
Opening Trade Receivables= ₹ 72,000- ₹ 40,000 = ₹ 32,000
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