Question 73 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 73 Chapter 4 of +2-B

Question 73 Chapter 4 of +2-B

Interest Coverage Ratio

73. Following figures have been extracted from Shivalika Mills Ltd.:
Inventory in the beginning of the year 60,000.
Inventory at the end of the year 1,00,000.
Inventory Turnover Ratio 8 times.
Selling price 25% above cost.
Compute the amount of Gross Profit and Revenue from Operations (Net Sales).

The solution of Question 73 Chapter 4 of +2-B: –

Average Inventory Opening Inventory + Closing Inventory
Average Inventory
Average Inventory Rs. 60,000 + Rs. 1,00,000
2
  = Rs. 80,000

 

Inventory Turnover Ratio Cost of goods sold
Average Inventory
8 Cost of goods sold
Rs. 80,000

 

Cost of goods sold = Rs. 80,000 x 8
Cost of goods sold = Rs. 6,40,000

 

Gross Profit = Rs.6,40,000 x 25
100
  = Rs.1,60,000    

 

Sales = Cost of goods sold + Gross Profit
  = Rs. 6,40,000 + Rs. 1,60,000
  = Rs. 8,00,000



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

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