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Question 138 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question No. 138- Chapter No.4 - T.S. Grewal +2 Book Part B

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Question 138 Chapter 4 of +2-B

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Miscellaneous

138. From the following information, calculate Inventory Turnover Ratio;
Operating Ratio and Working Capital Turnover Ratio:
Opening Inventory 28,000; Closing Inventory 22,000; Purchases 46,000;
Revenue from Operations, i.e., Net Sales 80,000; Return 10,000; Carriage
Inwards 4,000; Office Expenses 4,000; Selling and Distribution Expenses
2,000; Working Capital 40,000.

 

The solution of Question 138 Chapter 4 of +2-B: –

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Cost of Goods Sold=Opening Inventory + Purchases + Carriage Inwards − Closing Inventory
 =Rs 28,000 + Rs 46,000 + Rs 4,000 – Rs 22,000
 =Rs. 56,000

 

Average Inventory=Opening Inventory + Closing Inventory
2
Current Ratio=Rs. 28,000 + Rs 22,000
2
 =Rs 25,000

 

Inventory Turnover Ratio=Cost of Goods Sold
Average Inventory
 =Rs. 56,000
Rs. 25,000
 =2.24 Times

 

Operating Expenses=Office Expenses + Selling and Distribution Expenses
 =Rs 4,000 − Rs 2,000
 =Rs 6,000
Operating Cost=Cost of Goods Sold + Operating Expenses
 =Rs 56,000 + Rs 62,000
 =Rs 62,000
Operating Ratio=Operating CostX100
Net Sales

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Operating Ratio=Rs 62,000X100
Rs 80,000
 =77.5%  
Working Capital=Rs 40,000
Net Sales=Rs 80,000
Working Capital Turnover Ratio=Net Sales
Working Capital
 =Rs 80,000
Rs 40,000
 =2 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)

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)

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

Question 1 Chapter 1 of +2-B
T.S. Grewal’s Analysis of Financial Statements

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