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12th | Accounting Ratio | Question No. 171 To 175 | Ts Grewal Solution 2023-2024

Question 171:

Calculate Revenue from Operations of BN Ltd. from the following information:

Current Assets 8,00,000

Quick Ratio is 1.5:1

Current Ratio is 2:1.

Inventory Turnover Ratio is 6 times.

Goods were sold at a profit of 25% on cost.

(CBSE 2019)

 

Answer:

 

Current Ratio = Current Assets/ Current Liabilities

2:1 = 8,00,000/ Current Liabilities

Current Liabilities= 8,00,000/2=4,00,000

 

Quick Assets= 4,00,000×1.5=6,00,000

Working Capital = Current Assets - Current Liabilities

Working Capital = 8,00,000 – 4,00,000

Working Capital = 4,00,000

Inventory= Current Assets – Quick Assets

Inventory= 8,00,000 – 6,00,000

Inventory= 2,00,000

Inventory Turnover Ratio= Cost of Revenue from operation/Average Inventory

Cost of Revenue from operation = Inventory× Inventory Turnover Ratio

Cost of Revenue from operation = 2,00,000 × 6

Cost of Revenue from operation = 12,00,000

 

Profit of 25% on cost

therefore,

it is assumed that

Cost is equal to 100%

Revenue

=

Cost

+ Profit

125

=

100

+25

 

Hence,

Revenue= 12,00,000×125/100=15,00,000

Question 172:

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 173:

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 174: From the following information, calculate:

(i) Return on Investment Ratio.

(ii) Net Assets Turnover Ratio.

Particulars

`

Net Profit after Interest and Tax

2,40,000

Tax

1,60,000

Net Fixed Assets: Property, Plant and Equipment and intangible Assets

10,00,000

Non-current Investments (Non-trade)

1,00,000

Equity Share Capital (Face Value 10 per share)

5,00,000

15% Preference Share Capital

1,00,000

Reserves and Surplus (including surplus of the year under consideration)

2,00,000

10% Debentures

4,00,000

Revenue from Operations

24,00,000


Answer:

(i)                 Return on Investment Ratio

Return on Capital Employed = Profit Before interest, tax and dividend/ Capital Employed×100

Return on Capital Employed (ROI)  = 4,40,000/12,00,000×100=36.67%

 

Working Note:

Interest =4,00,000×15/100=60,000

Profit Before interest= Profit after interest + Interest

Profit Before interest and tax=2,40,000+1,60,000+40,000=4,40,000

Capital Employed= Equity Share Capital +15% Preference Share Capital +Reserves and Surplus+10% Debentures

Capital Employed= 5,00,000+1,00,000+2,00,000+4,00,000=12,00,000

 

 

(ii)               Net Assets Turnover Ratio

Net Assets Turnover Ratio = Revenue from Operations/ Fixed Assets (Net)

Net Assets Turnover Ratio = 24,00,000/12,00,000

Net Assets Turnover Ratio = 2 Times

Question 175:

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%

 

 

Ts Grewal Solution 2023-2024

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Class 12 / Volume – I

Chapter 3 – Accounting Ratio

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