Calculate credit revenue from operations using following information:
Total revenue from operations: ₹4,00,000
Cash received from operations are 25% of Credit revenue from operations.
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹3,20,000.
Total revenue from operations: ₹4,00,000
Cash received from operations are 25% of Credit revenue from operations.
Let credit revenue from operations = x
Cash revenue from operations = 25% of x
x + 25% of x = 4,00,000
x + x/4 = 4,00,000
(4x + x)/4 = 4,00,000
5x/4 = 4,00,000
x = 4,00,000 x 4/5
= 3,20,000
Thus, credit revenue from operations is ₹3,20,000.