Loading Tutorstips...
✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Inventory Turnover Ratio 5 times; Cost of Revenue from Operations (Cost of Goods Sold) ₹18,90,000. Calculate the Opening Inventory and Closing Inventory if Inventory at the end is 2.5 times more than that at the beginning.
Average Inventory = Cost of Goods Sold ÷ Inventory Turnover Ratio = 18,90,000 ÷ 5 = ₹3,78,000
Let Opening Inventory = x. Since the closing inventory is 2.5 times MORE than opening (i.e. an additional 2.5x on top of x): Closing Inventory = x + 2.5x = 3.5x.
Average Inventory = (x + 3.5x) ÷ 2
3,78,000 = 4.5x ÷ 2
4.5x = 7,56,000
x = ₹1,68,000 (Opening Inventory)
Closing Inventory = 3.5 × 1,68,000 = ₹5,88,000
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.
This guide covers "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.94 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
You can take our custom-built interactive practice quiz directly on this page to test your understanding of "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.94 - Accounting Ratios" instantly.