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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Cash Revenue from Operations (Cash Sales) ₹2,00,000, Cost of Revenue from Operations or Cost of Goods Sold ₹3,50,000, Gross Profit ₹1,50,000, Trade Receivables Turnover Ratio 3 times. Calculate the Opening and Closing Trade Receivables in each of the following alternative cases:
Case 1: Closing Trade Receivables were ₹1,00,000 in excess of Opening Trade Receivables.
Case 2: Trade Receivables at the end were 3 times that at the beginning.
Case 3: Trade Receivables at the end were 3 times MORE than that at the beginning.
Total Sales = Cost of Goods Sold + Gross Profit = 3,50,000 + 1,50,000 = ₹5,00,000
Credit Sales = Total Sales − Cash Sales = 5,00,000 − 2,00,000 = ₹3,00,000
Average Trade Receivables = Credit Sales ÷ Trade Receivables Turnover Ratio = 3,00,000 ÷ 3 = ₹1,00,000
Case 1: Let Opening = x. Closing = x + 1,00,000.
(x + x + 1,00,000) ÷ 2 = 1,00,000 ⇒ 2x + 1,00,000 = 2,00,000 ⇒ x = ₹50,000
Opening = ₹50,000; Closing = 50,000 + 1,00,000 = ₹1,50,000
Case 2: Let Opening = x. Closing = 3x.
(x + 3x) ÷ 2 = 1,00,000 ⇒ 4x = 2,00,000 ⇒ x = ₹50,000
Opening = ₹50,000; Closing = 3 × 50,000 = ₹1,50,000
Case 3: Let Opening = x. Closing = x + 3x = 4x.
(x + 4x) ÷ 2 = 1,00,000 ⇒ 5x = 2,00,000 ⇒ x = ₹40,000
Opening = ₹40,000; Closing = 4 × 40,000 = ₹1,60,000
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.109 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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