From the following information, prepare a Comparative Statement of Profit and Loss for the year ended $31^{\text {st }}$ March, 2024 :
Particulars 2023-24 (₹) 2022-23 (₹) Revenue from operations 8,00,000 4,00,000 Cost of revenue from operations 4,00,000 2,00,000 Employee benefit expenses 1,60,000 80,000 Tax Rate 50%
(a) From the following information, calculate Opening Trade Receivables and Closing Trade Receivables :
- Trade Receivables Turnover Ratio = 4 times
- Closing Trade Receivables were ₹ 20,000 more than that in the beginning.
- Cost of Revenue from operations = ₹ 6,40,000.
- Cash Revenue from operations = $\frac{1}{3}$ of Credit Revenue from Operations
- Gross Profit Ratio = 20%
From the following information, prepare a Comparative Statement of Profit and Loss for the year ended $31^{\text {st }}$ March, 2024 :
| Particulars | 2023-24 (₹) | 2022-23 (₹) |
| Revenue from operations | 8,00,000 | 4,00,000 |
| Cost of revenue from operations | 4,00,000 | 2,00,000 |
| Employee benefit expenses | 1,60,000 | 80,000 |
| Tax Rate | 50% |
(a) From the following information, calculate Opening Trade Receivables and Closing Trade Receivables :
- Trade Receivables Turnover Ratio = 4 times
- Closing Trade Receivables were ₹ 20,000 more than that in the beginning.
- Cost of Revenue from operations = ₹ 6,40,000.
- Cash Revenue from operations = $\frac{1}{3}$ of Credit Revenue from Operations
- Gross Profit Ratio = 20%
Show Hint
Solution and Explanation
Let's calculate the Opening and Closing Trade Receivables.
1. Calculate Revenue from Operations (Credit Revenue):
Gross Profit Ratio = 20%
Cost of Revenue from Operations = Rs 6,40,000
Revenue from Operations = Cost of Revenue from Operations / (1 - Gross Profit Ratio)
Revenue from Operations = Rs 6,40,000 / 0.80 = Rs 8,00,000
Cash Revenue = (1/3) * Credit Revenue
Total Revenue from Operations = Cash Revenue + Credit Revenue
Rs 8,00,000 = (4/3) * Credit Revenue
Credit Revenue = Rs 8,00,000 * (3/4) = Rs 6,00,000
2. Calculate Average Trade Receivables:
Trade Receivables Turnover Ratio = Credit Revenue / Average Trade Receivables
4 = Rs 6,00,000 / Average Trade Receivables
Average Trade Receivables = Rs 6,00,000 / 4 = Rs 1,50,000
3. Let's denote Opening Trade Receivables as X:
Closing Trade Receivables = X + Rs 20,000
Average Trade Receivables = (Opening + Closing Trade Receivables) / 2
Rs 1,50,000 = (2X + Rs 20,000) / 2
Rs 3,00,000 = 2X + Rs 20,000
2X = Rs 2,80,000
X = Rs 1,40,000
4. Calculate Opening and Closing Trade Receivables:
Opening Trade Receivables = Rs 1,40,000
Closing Trade Receivables = Rs 1,40,000 + Rs 20,000 = Rs 1,60,000
Answer:
Opening Trade Receivables: Rs 1,40,000
Closing Trade Receivables: Rs 1,60,000
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