# 12th | Ts grewal 2021-2022 Question 71 to 75 | ch:4 Accounting Ratios

#### Question 71:

From the following information, calculate Inventory Turnover Ratio:

 ` Revenue from Operations 16,00,000 Average Inventory 2,20,000 Gross Loss Ratio 5%

 Cost of Revenue from Operations =  Revenue from Operation+Gross Loss  =  16,00,000+80,000 =   ` 16,80,000 Inventory Turnover Ratio = Cost of Revenue from Operations/Average Inventory = 16,80,000/2,20,000 = 7.64 Times

#### Question 72:

Revenue from Operations  `4,00,000; Gross Profit  `1,00,000; Closing Inventory  `1,20,000; Excess of Closing Inventory over Opening Inventory  `40,000. Calculate Inventory Turnover Ratio.

 Sales = 4,00,000 Gross Profit = 1,00,000 Cost of Goods Sold = Sales − Gross Profit = 4,00,000 − 1,00,000  = 3,00,000 Let Opening Inventory = x Closing Inventory = x + 40,000 1,20,000 = x + 40,000 x = 80,000 Opening Inventory = 80,000

#### Question 73:

From the following data, calculate Inventory Turnover Ratio:
Total Sales
`5,00,000; Sales Return  `50,000; Gross Profit  `90,000; Closing Inventory  `1,00,000; Excess of Closing Inventory over Opening Inventory  `20,000.

Cost of Goods Sold = Net Sales (Sales – Sales Return) – Gross Profit
=
` 5,00,000 –  ` 50,000 –  ` 90,000

=  ` 3,60,000

Closing Inventory =  ` 1,00,000
Closing Inventory is
` 20,000 more than the Opening Inventory

Therefore, Opening Inventory =  ` 80,000 ( ` 1,00,000 –  ` 20,000)

 Average Stock = Opening Stock + Closing Stock/2 =80,000+1,00,000/2=90,000 Stock turnover ratio = Cost of Goods sold / Average Stock =3,60,000/90,000 = 4 Times

#### Question 74:

`2,00,000 is the Cost of Revenue from Operations (Cost of Goods Sold), during the year. If Inventory Turnover Ratio is 8 times, calculate inventories at the end of the year. Inventories at the end is 1.5 times that of in the beginning.

 Inventory turnover ratio = Cost of Goods sold / Average Inventory 8 =2,00,000/ Average Inventory Average Inventory = 25,000

Let Opening Inventory = x

Closing Inventory = 1.5 × x = 1.5 x

 Average Inventory = Opening Inventory + Closing Inventory /2 25,000 = x+1.5 x / 2 Or,    2.5x =50,000 Or,         x =20,000

Opening Inventory = x =  ` 20,000

Closing Inventory = 1.5 x = 20,000 × 1.5 =  ` 30,000

#### Question 75: From the following information obtained from the books of Kundan Ltd., calculate the Inventory Turnover Ratio for the years 2015-16 and 2016-17:

 Particulars 2015-16 (`) 2016-17 (`) Inventory on 31st March Revenue from Operations (Gross Profit is 25% on Cost of Revenue from Operations) 7,00,000 50,00,000 17,00,000 75,00,000

In the year 2015-16, inventory increased by `2,00,000. (Delhi and Al 2018)

It is assumed

Cost =100

Profit=25

Revenue=125

Gross Profit=50,00,000×25/125=10,00,000

Cost of goods sold=50,00,000-10,00,000 =40,00,000

Opening Inventory=7,00,000-2,00,000=5,00,000

Average Inventory=5,00,000+7,00,000/2=6,00,000

Inventory turnover Ratio( 2015-16)= 40,00,000/6,00,000

Inventory turnover Ratio( 2015-16)= 6.67 Time

Gross Profit=75,00,000×25/125=15,00,000

Cost of goods sold=75,00,000-15,00,000 =60,00,000

Average Inventory=7,00,000+17,00,000/2=12,00,000

Inventory turnover Ratio ( 2016-17)= 60,00,000/12,00,000

Inventory turnover Ratio ( 2016-17)= 5 Times