# Question 70 Chapter 7 -Unimax Publication Class 12 Part 2 – 2021

Question No -70 Chapter no - 7 Unimax Class - 12 Part -II

Question 70 Chapter 7 – Unimax Publication Class 12 Part 2 – 2021

70. The following are some of the ratios of pionner Ltd.

 Inventory turnover ratio 4 months Creditor turnover ratio 3 months Debtors turnover ratio 1.5months Gross profit ratio 20 %

## The solution of Question 70 Chapter 7 – Unimax Publication Class 12 Part 2-2021 : –

 (i) G.P. ratio = G.P. X 100 Net sales
 40 % = 4,00,000 X 100 Net sales
 Net sales = 4,00,000 X 100 40 = ₹ 10,00,000
 (ii) G.P = Net sales – C.O.G.S 4,00,000 = 10,00,000 – 4,00,000 C.O.G.S. = 10,00,000 – 4,00,000 = 6,00,000
 (iii) Inventory turnover ratio = 12 months STR
 4 = 12 STR
 Stock turnover ratio = 12 = 3times 4

 = C.O.G.S. Average Stock
 3 = 6,00,000 Average Stock
 Average Stock = 6,00,000 3 = ₹ 2,00,000
 Let opening stock = x Let closing stock = x + 50,000
 Average stock = Opening stock+closing stock 2
 = x + x + 50,000 2
 4,00,000 = 2x + 50,000 2x = 4,00,000 – 50,000
 = 3,50,000 2 = ₹ 1,75,000
 Closing stock = x + 50,000 = 1,75,000 + 50,000 Closing stock = 2,25,000 Ans. (iv) C.O.G.S = opening stock + net purchases + direct expenses – closing stocks 6,00,000 = = 1,75,000 + purchases + nil – 2,25,000 6,00,000 = purchases – 50,000 Purchases = 6,00,000 + 50,000 Purchases = 6,50,000 Ans.

 (v) Inventory turnover ratio = 12 months CTR
 3 = 12 CTR
 Creditors turnover ratio = 12 = 4times 3
 Creditors turnover ratio = net credit purchases creditors+bills payable
 4 = 6,50,000 Creditors +B/P
 Creditors +B/P = 6,50,000 4
 Creditors + 25,000 = 1,62,500 Creditors = 1,62,500 – 25,000 Sundry creditors = 1,37,500 Ans
 (vi) Average collection period = 12 months DTR
 1.5 = 12 DTR

 Debtors turnover ratio = 12 15 = 8 times
 Debtors turnover ratio = Net Credit Sales Debtors +B/R
 8 = 10,00,000 Debtors +B/R
 Debtors +B/R = 10,00,000 8
 Debtors + 40,000 = 1,25,000 Debtors = 1,25,000 – 40,000 Sundry creditors = ₹ 85,000 Ans

Comment if you have any Doubts.

Accounting Ratios – Meaning and Definition