The following information has been obtained from the books of Naval Ltd. Trade receivables turnover ratio of the company is $\displaystyle 4$ times, cost of revenue Hom operations ₹ $\displaystyle 6,210,000$ , gross prost ratio $\displaystyle 20$%, closing trade receivables were ₹ $\displaystyle 20,000$ more than that in the beginning, cash revenue from . . $\displaystyle 1$ . . . operations being $\displaystyle 33$ - % of credit revenue from operations. Calculate its $\displaystyle 3$ opening and closing trade receivables.

Trade Receivables Turnover Ratio = Credit Revenue from Operations ……….….. ½ Average Trade Receivables Gross Profit ratio is $\displaystyle 20$% Gross Profit = Revenue from operations - Cost of revenue from operations \ Cost of revenue from operations = Revenue from operations - Gross Profit … ½ Cost of Revenue from operations = ₹ $\displaystyle 6,40,000$ = Assume Revenue from operations X Gross Profit = $\displaystyle 20$% of X X – $\displaystyle 20$/$\displaystyle 100$ X = ₹ $\displaystyle 6,40,000$ X = ₹ $\displaystyle 6,40,000$ x $\displaystyle 100$/$\displaystyle 80$ = ₹ $\displaystyle 8,00,000$ \ Revenue from operations =₹ $\displaystyle 8,00,000$ ……………………………………… ½ Alternatively, Revenue from operations can be calculated as- Gross Profit ratio = $\displaystyle 20$% of Revenue from operations = $\displaystyle 25$% of cost of Revenue from operations \ Gross profit = $\displaystyle 25$% of ₹$\displaystyle 6,40,000$ = ₹ $\displaystyle 1,60,000$ = + Revenue from operations Cost of revenue from operations Gross Profit = + = Revenue from operations ₹$\displaystyle 6,40,000$ ₹$\displaystyle 1,60,000$ ₹$\displaystyle 8,00,000$ = + Revenue from operations Cash Revenue from operations Credit Revenue from operations ! + ₹ $\displaystyle 8,00,000$ "# Credit Revenue from operations Credit Revenue from Operations $\displaystyle ₹ $8,00,000$\displaystyle = $4$\displaystyle /$3$\displaystyle of Credit Revenue from Operations $19$\displaystyle = Credit Revenue from Operations $8,00,000$\displaystyle x ¾ = ₹ $6,00,000$\displaystyle ………….. ½ Trade Receivables. turnover ratio = $4$\displaystyle times \ $4$\displaystyle = $6,00,000$\displaystyle Average Receivables = Average Trade Receivables ₹ $1,50,000$\displaystyle ……………………………………..... ½ Average Trade Receivables = Opening Trade Receivables + Closing Trade Receivables $2$\displaystyle … ½ Closing Trade Receivables = $20,000$\displaystyle + Opening Trade Receivables ð $1,50,000$\displaystyle = ($2$\displaystyle Opening Trade receivables + $20,000$\displaystyle ) /$2$\displaystyle ð Opening Trade Receivables = ₹ $1,40,000$\displaystyle ……………………………… ½ Closing Trade Receivables = ₹$20,000$\displaystyle + ₹ $140,000$\displaystyle = ₹$1,60,000$ ………………………………………... ½