Question 72 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 72 Chapter 4 of +2-B

Question 72 Chapter 4 of +2-B

Interest Coverage Ratio

72. From the following information, determine Opening and Closing inventories:
Inventory Turnover Ratio 5 Times, Total sales ₹ 2,00,000, Gross Profit Ratio 25%. Closing Inventory is more by ₹ 4,000 than the Opening Inventory.

The solution of Question 72 Chapter 4 of +2-B: –

Total Sales = Rs. 2,00,000
Gross Profit = 25% on Sales
Gross Profit = Rs.2,00,000 x 25
100
  = Rs. 50,000    
Cost of goods sold = Total Sales – Gross Profit
  = Rs. 2,00,000 – Rs. 50,000
  = Rs. 1,50,000

 

Inventory Turnover Ratio Cost of goods sold
Average Inventory

 

5 1,50,000
Average Inventory
Average Inventory = Rs. 1,50,000 / 5
  = Rs. 30,000
Opening Inventory = x
Closing Inventory = X + Rs. 4,000

 

Average Inventory Opening Inventory +Closing Inventory
2
Rs. 30,000 X + (X+ Rs. 4,000)
2

 

Rs. 60,000 = 2x + Rs. 4,000
2x = Rs. 60,000 – Rs. 4,000
x = Rs. 56,000 / 2
x = Rs. 28,000
Opening Inventory = Rs. 28,000
Closing Inventory = Rs. 28,000 + Rs. 4,000
  = Rs. 32,000



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

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