12th | Volume 3 | Chapter:4 | Question No. 146 to 150 | Accounting Ratio

Question 146:

Opening Inventory `80,000; Purchases `4,30,900; Direct Expenses `4,000; Closing Inventory `1,60,000; Administrative Expenses `21,100; Selling and Distribution Expenses `40,000; Revenue from Operations, i.e., Net Sales `10,00,000. Calculate Inventory Turnover Ratio; Gross Profit Ratio; and Opening Ratio.

Answer:

(i)

Opening Inventory = 80,000

Closing Inventory = 1,60,000

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

= 80,000 + 4,30,900 + 4,000 − 1,60,000

= 3,54,900

Average Inventory= Opening Inventory+ Closing Inventory/2

=80,000+90,000/2

=1,20,000

Inventory Turnover Ratio= Cost of Goods Sold/ Average Inventory

=3,54,000/1,20,000

=2.96 Times

(ii)

Sales = 10,00,000

Gross Profit = Net Sales − Cost of Goods Sold

= 10,00,000 − 3,54,900 = 6,45,100

Gross Profit Ratio= Gross profit ×100/Net Sales

= 645000×100/10,00,000

=64.51%

(iii)

Operating Expenses = Administration Expenses + Selling and Distribution Expenses

= 21,100 + 40,000 = 61,100

Operating Cost = Cost of Goods Sold+ Operating Expenses

=3,54,900+61,100=4,16,000

Operating Ratio= Operating Cost/ Net Sales ×100

=4,16,000/10,00,000× 100

= 41.6%

Question 147:

Following information is given about a company:

	`		`
Revenue From Operations, i.e., Net Sales Gross Profit	1,50,000	Opening Inventory	29,000
Cost of Revenue From Operations	30,000	Closing Inventory	31,000
(Cost of Goods Sold)	1,20,000	Debtors	16,000

From the above information, calculate following ratios:

(i) Gross Profit Ratio,

(ii) Inventory Turnover Ratio, and

(iii) Trade Receivables Turnover Ratio.

Answer:

(i)

Sales = 1,50,000

Gross Profit = 30,000

Gross Profit Ratio= Gross profit ×100/Net Sales

= 30,000×100/1,50,000

= 20%

(ii)

Opening Inventory = 29,000

Closing Inventory = 31,000

Average Inventory= Opening Inventory+ Closing Inventory/2

=29,000+30,000/2

=30,000

Cost of Goods Sold = 1,20,000

Inventory tunover ratio= Cost of goods sold / Average Inventory

= 1,20,000/30,000

= 4 Times

(iii)

Trade receivable turnover ratio= Net Credit sales/ Average Trade receivables

Trade receivable turnover ratio= 1,50,000/16,000

= 9.4 Times

Question 148:

From the following calculate:

(a) Current Ratio; and
(b) Working Capital Turnover Ratio.

		`
(i)	Revenue from Operations	1,50,000
(ii)	Total Assets	1,00,000
(iii)	Shareholders' Funds	60,000
(iv)	Non-current Liabilities	20,000
(v)	Non-current Assets	50,000

Answer:

A) Current Ratio = Current Assets Current Liabilities
Current Assets = Total Assets – Non Current Assets
                           = 1,00,000 – 50,000
                           = ` 50,000

Total Assets = Total Liabilities = Shareholders’ Funds + Non-Current Liabilities + Current Liabilities
     1,00,000 = 60,000 + 20,000 + Current Liabilities
Current Liabilities = ` 20,000
       Current Ratio = 50,000/20,000 = 2.5 : 1

B) Working Capital Turnover Ratio = Revenue from Operations /Working Capital
Working Capital = Current Assets – Current Liabilities
                              = 50,000 – 20,000
                              = ` 30,000

Working Capital Turnover Ratio = 1,50,000/30,000 = 5 times

Question 149:

From the following information obtained from the books of Kamal Ltd., calculate (i) Gross Profit Ratio and (ii) Net Profit Ratio:

	`
Revenue from Operations	2,50,000
Purchases	1,05,000
Carriage Inwards	4,000
Salaries	30,000
Decrease in Inventory	15,000
Return Outwards	5,000
Wages	18,000

(CBSE 2020)

Answer:

(i) Gross Profit= Revenue- Net Purchase- Carriage Inwards- Wages- Decrease in Inventory

Gross Profit= 2,50,000- (1,05,000-5,000)- 4,0000 – 18,000-15,000

Gross Profit=1,13,500

Gross Profit=1,13,500×100/2,50,000 =45.20%

(ii) Net Profit= Gross Profit –Salaries

Net Profit= 1,13,000 – 30,000

Net Profit= 83,000

Net Profit=83,500×100/2,50,000 =33.20%

Question 150:

Calculate following ratios on the basis of the following information:
(i) Gross Profit Ratio;
(ii) Current Ratio;
(iii) Acid Test Ratio; and
(iv) Inventory Turnover Ratio.