# 12th | Ts grewal 2021-2022 Question 66 to 70 | ch:4 Accounting Ratios

#### Question 66:

From the following details, calculate Inventory Turnover Ratio:

 ` Cost of Revenue from Operations (Cost of Goods Sold) 4,50,000 Inventory in the beginning of the year 1,25,000 Inventory at the close of the year 1,75,000

Inventory tunover ratio

#### = Cost of goods sold / Average Stock

Cost of Goods Sold

= 4,50,000

Average Stock

= Opening Stock + Closing Stock/2

=1,25,000+1,75,000/2

= 1,50,000

Inventory turnover ratio

=4,50,000/1,50,000

= 3 Times

#### Question 67: From the following information, calculate Inventory turnover ratio;

 Opening Inventory Purchases Carriage Inwards `40,000 `92,000 `4,000 Closing Inventory Wages Freight outwards `12,000 `6,000 `7,500

Inventory turnover ratio= Cost of revenue from operation/ average inventory

Inventory turnover ratio= 1,30,000 / 26,000 = 5 Times

 Cost of revenue from operations ( cost of goods sold) = opening inventory + purchases + carriage inward + wages - closing inventory = 40,000 + 92,000 + 4,000 + 6,000-12,000 = 1,30,000 Average inventory = opening inventory + closing inventory / 2 = 40,000 + 12,000 / 2 = 52,000 / 2 = 26,000

#### Question 68:

Cost of Revenue from Operations (Cost of Goods Sold)  `5,00,000; Purchases  `5,50,000; Opening Inventory  `1,00,000.
Calculate Inventory Turnover Ratio.

Cost of Goods Sold = Opening Inventory + Purchases − Closing Inventory

5,00,000 = 1,00,000 + 5,50,000 − Closing Inventory

Closing Inventory = 1,50,000

 Average Stock = Opening Stock + Closing Stock/2 =1,00,000+1,50,000/2 = 1,25,000 Inventory tunover ratio = Cost of goods sold / Average Inventory =5,00,000/1,25,000 =4 times

#### Question 69:

Calculate Inventory Turnover Ratio from the following information:
Opening Inventory is
`50,000; Purchases  `3,90,000; Revenue from Operations, i.e., Net Sales  `6,00,000; Gross Profit Ratio 30%.

Cost of Goods Sold = Net Sales – Gross Profit
=
` 6,00,000 – 30% of  ` 6,00,000
=
` 6,00,000 –  ` 1,80,000 =  ` 4,20,000

Cost of Goods Sold = Opening Inventory + Purchases – Closing Inventory

` 4,20,000  =  ` 50,000 +  ` 3,90,000 – Closing Inventory
Closing Inventory =
` 50,000 +  ` 3,90,000 –  ` 4,20,000
=
` 20,000

 Average Stock = Opening Stock + Closing Stock/2 =50,000+20,000/2=35,000 Stock turnover ratio = Cost of Goods sold / Average Stock =4,20,000/35,000 =12 Times

#### Question 70:

Calculate Inventory Turnover Ratio from the following:

 ` Opening Inventory 58,000 Closing Inventory 62,000 Revenue from Operations, i.e., Sales 6,40,000 Gross Profit Ratio 25%

Sales = 6,40,000

Gross Profit = 25% on Sales

Gross profit=6,40,000×25/100=1,60,000

Cost of Goods Sold = Total Sales − Gross Profit

Cost of Goods Sold = 6,40,000 – 1,60,000

Cost of Goods Sold = 4,80,000

 Average Inventory = Opening Inventory + Closing Inventory /2 =58,000+62,000/2=60,000 Inventory turnover ratio = Cost of Goods sold / Average Inventory =4,80,000/60,000 =8 Times