Question
76:
Following figures have been extracted from Shivalika Mills Ltd.:
Inventory
in the beginning of the year ` 60,000.
Inventory at the end of the year ` 1,00,000.
Inventory Turnover Ratio 8 times.
Selling price 25% above cost.
Compute
amount of Gross Profit and Revenue from Operations (Net Sales).
Answer:
Average Inventory= Opening Inventory +Closing Inventory/2
=60,000+1,00,000/2=80,000
Inventory tunover ratio= Cost of goods sold / Average Stock
8 = Cost of goods sold /
80,000
Cost of goods sold=6,40,000
Gross Profit = 25% on Cost
Gross profit =6,40,000×25/100=1,60,000
Sales = Cost of Goods Sold + Gross Profit
= 6,40,000 + 1,60,000 = 8,00,000
Question
77:
From the following Information, calculate Inventory
Turnover Ratio:
Credit Revenue from Operations ` 6,00,000; Cash Revenue from
Operations ` 2,00,000, Gross Profit 25% of Cost, Closing Inventory was 3 times
the Opening Inventory. Opening Inventory was 10% of Cost of Revenue from
Operations.
Answer:
Average Inventory=60,000+1,80,000/2=
` 1,20,000
Opening Inventory=6,00,000×10%=
` 60,000
Closing Inventory=60,000×3=
` 1,80,000
Cost of Revenue from Operations=Revenue from Operations-Gross Profit
=8,00,000-2,00,000=
` 6,00,000
Inventory Turnover Ratio=Cost of Revenue from OperationsAverage Inventory
=6,00,000/1,20,000=5 Times
Question 78:
From the following information, calculate value of Opening Inventory:
|
Closing
Inventory |
= |
` 68,000 |
|
Total
Sales |
= |
` 4,80,000 (including Cash Sales
`
1,20,000) |
|
Total
Purchases |
= |
` 3,60,000 (including Credit Purchases
`
2,39,200) |
Goods
are sold at a profit of 25% on cost.
Answer:
Let Cost of Goods Sold be = x
Gross profit=X×25/100=25X/100
Cost of goods sold = Sales – Gross profit
Or X=4,80,000-25X/100
Or X+25X/100=4,80,000
Or 125X/100=4,80,000
X=4,80,000×100/125=3,84,000
Cost of Goods Sold = x = ` 3,84,000
Cost of Goods Sold = Opening Inventory (Stock) + Purchases − Closing Inventory (Stock)
3,84,000 = Opening Inventory + 3,60,000 − 68,000
Opening Inventory = 3,84,000 − 2,92,000 = ` 92,000
Question 79:
From the following information, determine
Opening and Closing inventories:
Inventory Turnover Ratio 5 Times, Total sales `2,00,000, Gross
Profit Ratio 25%. Closing Inventory is more by
`4,000
than the Opening Inventory.
Answer:
Sales = 2,00,000
Gross Profit = 25% on Sales
Gross Profit = 2,00,000×25/100=50,000
Cost of Goods Sold = Total Sales − Gross Profit
= 2,00,000 − 50,000 = 1,50,000
Inventory tunover ratio= Cost of goods sold / Average Stock
5=1,50,000/ Inventory tunover
Inventory tunover=30,000
Let Opening Inventory = x
Closing Inventory = x + 4,000
|
Average Stock |
=
Opening Stock + Closing Stock |
30,000=X+X+4,000/2
Or, 60,000=2X+4,000
Or, X=28,000
Opening Inventory = x = ` 28,000
Closing Inventory = x + 4,000 = 28,000 + 4,000 = ` 32,000
Question
80:
Inventory Turnover Ratio 5 times; Cost of Revenue from Operations (Cost of Goods Sold) ` 18,90,000. Calculate Opening Inventory and Closing Inventory if Inventory at the end is 2.5 times more than that in the beginning.
Answer:
Inventory tunover ratio= Cost of goods sold / Average Stock
5=18,90,000/Average Inventory
Average Inventory=3,78,000
Let Opening Inventory = x
Closing Inventory = 2.5x + x = 3.5 x
Average Inventory = Opening Inventory + Closing Inventory /2
3,78,000=X+3.5X/2
Or, 4.5X =7,56,000
Or, X =1,68,000
Opening Inventory = x = ` 1,68,000
Closing Inventory = 3.5 x = 3.5 × 1,68,000 = ` 5,88,000
Class : 12th | Ts Grewal solution 2022-2023
Volume 3 | Chapter 4: Accounting Ratio
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