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12th | Accounting Ratios | Question No. 76 To 80 | Ts Grewal Solution 2022-2023

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

 

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Ts Grewal Solution 2022-2023

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