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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Question 39 Chapter 14 of Class 12 Part – 2 – 2024
III. Activity Ratios
Inventory Turnover Ratio
39. (Cost of Goods Sold & G.P.) A business house turns over its inventory 7 times a year and carries an average inventory at a cost of 35,000. Find out the cost of goods sold and gross profit if the mark upon sales is 25%.
| Inventory Turnover Ratio | = | Cost of goods sold |
| Average Inventory |
| 7 | = | Cost of goods sold |
| ₹ 35,000 |
| Cost of goods sold | = | ₹ 35,000 x 7 |
| = | ₹ 2,45,000 | |
| Gross Profit on Sales | = | 25% |
| Sales | = | ₹ 100 |
| Cost of goods sold | = | 100 - 25 |
| = | 75 |
| Gross profit | = | ₹ 2,45,000 | X | 25 |
| 75 | ||||
| = | ₹ 81,667 |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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