Question 135 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 135 Chapter 4 of +2-B

Question 135 Chapter 4 of +2-B

Miscellaneous

135. Opening Inventory Rs 80,000; Purchases Rs 4,30,900; Direct Expenses Rs 4,000; Closing Inventory Rs 1,60,000; Administrative Expenses Rs 21,100; Selling and Distribution Expenses Rs 40,000;Revenue from Operations, i.e., Net Sales Rs 10,00,000.
Calculate Inventory Turnover Ratio; Gross Profit Ratio; and Opening Ratio.

You are required to calculate Return on Investment for the year 2018-19 with reference to Opening Capital Employed.

 

The solution of Question 135 Chapter 4 of +2-B: –

I

Cost of Goods Sold = Opening Inventory + Purchases + Direct Expenses − Closing Inventory
  = Rs 80,000 + Rs 4,30,900 + Rs 4,000 − Rs 1,60,000
  = Rs. 3,54,900

 

Average Inventory = Opening Inventory + Closing Inventory
2
  = Rs. 80,000 +Rs 1,60,000
2
  = Rs. 1,20,000
Average Inventory Turnover Ratio = Cost of Goods Sold
Average Inventory
  = Rs. 3,54,900
Rs. 1,20,000
  = 2.96 Times

II

Net Sales = Rs 10,00,000
Gross Profit = Net Sales − Cost of Goods Sold
  = Rs 10,00,000 − Rs 3,54,900
  = Rs 6,45,100
Gross Profit Ratio = Gross Profit X 100
Net Sales
Gross Profit Ratio = Rs 6,45,100 X 100
Rs 10,00,000
  = 64.51%
   

III

Operating Expenses = Administration Expenses + Selling and Distribution Expenses
  = Rs 21,100 − Rs 40,000
  = Rs 61,100
Operating Cost = Cost of Goods Sold + Operating Expenses
  = Rs 3,54,900 + Rs 61,100
  = Rs 4,16,000
Operating Ratio = Operating Cost X 100
Net Sales
Operating Ratio = Rs 4,16,000 X 100
Rs 10,00,000
  = 41.6%
   

 

 

 

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)

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

2 Book 3 min 225x300 - Question 135 Chapter 4 of +2-B  - T.S. Grewal 12 Class
T.S. Grewal’s Analysis of Financial Statements

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