Question 70 Chapter 4 of +2-B
Table of Contents
Interest Coverage Ratio
70. Calculate Inventory Turnover Ratio from the data given below:
| Rs. | Rs. | ||
| Inventory at the beginning of the year | 20,000 | Carriage Inwards | 5,000 |
| Inventory at the end of the year | 10,000 | Revenue from Operations, i.e., Sales | 1,00,000 |
| Purchases | 50,000 |
State the significance of this ratio.
The solution of Question 70 Chapter 4 of +2-B: –
| Cost of Goods of Goods Sold | = | Opening Stock +Purchases – Closing Stock |
| = | Rs. 20,000 + Rs. 50,000 + Rs. 5,000 − Rs.10,000 | |
| = | Rs. 65,000 |
| Average Inventory | = | Opening Inventory + Closing Inventory |
| 2 |
| Average Inventory | = | Rs. 20,000 + Rs. 10,000 |
| 2 | ||
| = | Rs. 15,000 |
| Inventory Turnover Ratio | = | Cost of Goods of Goods Sold |
| Average Stock |
| Inventory Turnover Ratio | = | Rs. 65,000 |
| Rs. 15,000 | ||
| = | 4.33 Times |
Balance Sheet: Meaning, Format & Examples
Thanks, Please Like and share with your friends
Advertisement-X
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. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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
