Question 91:
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
Calculation of Opening and Closing
Inventory
Question 92:
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 93:
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
Average Stock=30,000
Let Opening Inventory = x
Closing Inventory = x + 4,000
|
Average
Stock |
= Opening Stock + Closing Stock/2 |
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 94:
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
Question 95:
Calculation of Revenue from
Operations
The average inventory of AB Ltd.
is ₹1,00,000 and the Inventory Turnover Ratio is
6 times. Calculate the amount of Revenue from Operations if goods are sold at a
profit of 25% on Revenue from Operations.
(CBSE 2024)
Answer:
Inventory Turnover Ratio = Cost of revenue from operation ÷ average
inventory
Inventory Turnover Ratio = Cost of revenue from operation ÷ 1,00,000 = 6 Times
Cost of revenue from
operation= 1,00,000×6=6,00,000
Since the goods are sold at a profit of 25% on Revenue from Operations,
Revenue from Operations= Cost of revenue from operation+ profit of 25% on
Revenue from Operations
Revenue from Operations = 6,00,000+ profit of 25%
on Revenue from Operations
Profit = 6,00,000×25÷75=2,00,000
Revenue from Operations = 6,00,000+ 2,00,000 =8,00,000
Alternatively,
Revenue from Operations = 6,00,000×100÷75 =8,00,000
Ts Grewal Solution 2025-2026
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Class 12 / Volume – III
Chapter 4 – Accounting Ratios