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

Question No. 135- Chapter No.4 - T.S. Grewal +2 Book Part 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

Comment if you have any question.

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. 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