# Question 118 Chapter 4 of +2-B – USHA Publication 12 Class

Question 118 Chapter 4 of +2-B

Miscellaneous (Analytical Questions)

118. (Calculation of Opening Inventory & Closing Inventory) Calculate the amount of opening stock and closing stock from the following figures:-
Average Debt Collection period 4 months; Inventory Turnover ratio 3 times, Average Trade Receivable ₹ 1,00,000; cash sales being 25% of total sales; Gross profit ratio 25% Inventory at the end was 3 times more than that in the beginning.

The solution of Question 118 Chapter 4 of +2-B: –

 Average Debt Collection Period = No. of working days Debtors Turnover Ratio 4 = 12 Months Debtors Turnover Ratio Debtors Turnover Ratio = 12 4 = 3 times
 Debtors Turnover Ratio = Net Credit Sales Average Debtors 3 = Net Credit Sales ₹ 1,00,000 Net Credit Sales = 3 x 1,00,000 = ₹ 3,00,000 Let Assume Total Sales = ₹ 1 Cash Sales = 1 4

 (i) Return on investment Ratio = ₹ 1 – 1 4 = 3 4 Total Sales = 3 X x ₹ 3,00,000 4 = ₹ 4,00,000 Cost of goods sold = Sales – Gross Profit = ₹ 4,00,000 – 25% = ₹ 4,00,000 – ₹ 1,00,000 = ₹ 3,00,000 Inventory Turnover Ratio = Cost of goods sold Average Inventory 3 = ₹ 3,00,000 Average Inventory Average Inventory = ₹ 3,00,000 3 = ₹ 1,00,000 Average Inventory = Opening Stock + Closing Stock 2 ₹ 1,00,000 x 2 = Opening Stock + Closing Stock = ₹ 2,00,000 Opening Stock = ₹ 1 Closing Stock = ₹ 3 Total Stock = 1 + 3 = 4 Opening Stock = ₹ 2,00,000 X 1 4 = ₹ 50,000 Closing Stock = ₹ 1,00,000 X 3 4 = ₹ 1,50,000

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