Question 70 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 70 Chapter 4 of +2-B

Question 70 Chapter 4 of +2-B

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

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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)

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2 Book 3 min 225x300 - Question 70 Chapter 4 of +2-B  - T.S. Grewal 12 Class
T.S. Grewal’s Analysis of Financial Statements

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