Question 140 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 140 Chapter 4 of +2-B

Miscellaneous

140. 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.

	Rs		Rs
Gross Profit	50,000	Revenue from Operations	1,00,000
Inventory	15,000	Trade Receivables	27,500
Cash and Cash Equivalents	17,500	Current Liabilities	40,000

 

The solution of Question 140 Chapter 4 of +2-B: -

I

Gross Profit Ratio	=	Gross Profit	X	100
		Revenue from Operations

Gross Profit Ratio	=	Rs. 50,000	X	100
		Rs 1,00,000
	=	50%

II

Current Ratio	=	Current Assets
		Current Liabilities

Current Assets	=	Inventory + Cash and Cash Equivalents + Trade Receivables
	=	Rs 60,000
Current Liabilities	=	Rs 40,000

 

Current Ratio	=	Rs. 60,000
		Rs 40,000
	=	1.5 : 1

 

III

Liquid Ratio	=	Liquid Assets
		Current Liabilities

Liquid Assets	=	Cash and Cash Equivalents + Trade Receivables
	=	Rs 17,500 + Rs 27,500
	=	Rs 45,000

=	Rs 45,000
	Rs 40,000
=	1.125 : 1

IV

Inventory Turnover Ratio	=	Cost of Goods Sold
		Average Inventory

Cost of Goods Sold	=	Revenue from Operations − Gross Profit
	=	Rs 1,00,000 − Rs 50,000
	=	Rs 50,000
Average Inventory	=	Rs 15,000

=	Rs 50,000
	Rs 15,000
=	3.33 Times

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Also, Check out the solved question of previous Chapters: -

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 - Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 - Accounting for Partnership Firms - Fundamentals
• Chapter No. 3 - Goodwill: Nature and Valuation
• Chapter No. 4 - Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 - Admission of a Partner
• Chapter No. 6 - Retirement/Death of a Partner
• Chapter No. 7 - Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 - Company Accounts -  Accounting for Share Capital
• Chapter No. 9 - Company Accounts - Issue of Debentures
• Chapter No. 10 - Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 - Financial Statements of a Company
• Chapter No. 2 - Financial Statement Analysis 
• Chapter No. 3 - Tools of Financial Statement Analysis - Comparative Statements and Common- Size Statements
• Chapter No. 4 - Accounting Ratios
• Chapter No. 5 - Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication