Page No
4.110:
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% |
|
Answer:
|
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 |
Page No
4.110:
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.
Answer:
|
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 |
Average
Inventory= 80,000+1,20,000/2
Average
Inventory= 1,00,000
Cost of Goods
Sold = Revenue - Gross Profit
Cost of Goods
Sold = 4,00,000 - 1,00,000=3,00,000
Inventory
turnover Ratio= Cost of Goods Sold/Average inventory
Inventory
turnover Ratio=3,00,000/1,00,000
Inventory
turnover Ratio= 3 Times
Page No
4.110:
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.
Answer:
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 |
Page No
4.110:
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.
Answer:
|
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
Page No
4.110:
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)
Answer:
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
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