Question 102 Chapter 4 of +2-B
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Video Tag:Working Capital Turnover
102. A company earns Gross Profit of 25% on cost. For the year ended 31st
March, 2017 its Gross Profit was Rs. 5,00,000; Equity Share Capital of the
company was Rs. 10,00,000; Reserves and Surplus Rs. 2,00,000; Long
term Loan 3,00,000 and Non-current Assets were 10,00,000.
Compute the ‘Working Capital Turnover Ratio’ of the company.
The solution of Question 102 Chapter 4 of +2-B: –
Gross Profit | = | 25% on Cost |
Cost of Goods sold | = | 100 |
Gross Profit | = | 25 |
Revenue from Operations | = | 125 |
Revenue from Operations | = | Rs.5,00,000 | X | 125 |
25 | ||||
= | Rs.25,00,000 |
Capital Employed | = | Shareholder’s Funds + Non- Current Liabilities |
= | Rs. 10,00,000 + Rs. 2,00,000 + Rs. 3,00,000 | |
= | Rs. 15,00,000 | |
Working Capital | = | Capital Employed – Non- current Assets |
= | Rs. 15,00,000 – Rs. 10,00,000 | |
= | Rs. 5,00,000 |
Working Capital Turnover Ratio | = | Net Sales |
Working Capital |
= | Rs. 25,00,000 | |
Rs. 5,00,000 | ||
= | 5 Times |
Balance Sheet: Meaning, Format & Examples
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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)
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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