Calculate opening and closing trade receivbables from the following information if trade receivables trunover ratio is 3 times
(i) Cash revenue from operation s is `1//3rd` of credit revenue form operations
(ii) Cost of revenue form operations Rs 240000
(iii) Gross profit 25% on cost of revenue from operations
(iv) Trade receivables at the end were 3 times more than that of in the beginning.

Explanation

Total revenue from opertion s=cost of revenue from operations + gross profit
=Rs 240000+25% of Rs 240000=Rs 300000
Calculation of credit revenue from operations:
Let credit revenue form opertion s=x
cash revenue from operation `=x/3`
`x+x/3=Rs 300000`
3x+x=Rs 900000
`x=(Rs 900000)/(4)=Rs 225000("credit revenue from operations")/("Average trade receivables")`
`3=(Rs 2250000)/("Average trade receivables")`
Average trade receivables =`(Rs 225000)/(3)=Rs 750000`
Calculation of opening and closing trade receivables:
Average trade receivables =`("opening trade receivables +closing trade receivables")/(2)`
Let opening trade receivables =x, closing trade receivables =x+3x=4x
`Rs 75000=(x+4x)/(2)`
`x+4x=Rs150000,x=Rs150000//5=Rs 30000 ("opening trade receivabels")`
closing trade receivables =4x=Rs 30000xx4=Rs 120000