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 min 1024x576 - Question 138 Chapter 4 of +2-B  - T.S. Grewal 12 Class

Question 138 Chapter 4 of +2-B

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: –

 

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 Cost X 100
Net Sales
Operating Ratio = Rs 62,000 X 100
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)

  • 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 138 Chapter 4 of +2-B  - T.S. Grewal 12 Class
T.S. Grewal’s Analysis of Financial Statements

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