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

Question 73 Chapter 4 of +2-B
Question No. 73- Chapter No.4 - T.S. Grewal +2 Book Part B

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Question 73 Chapter 4 of +2-B

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

 

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

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

 

Gross Profit=Rs.6,40,000x25
100
 =Rs.1,60,000  

 

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

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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)

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

Question 1 Chapter 1 of +2-B
T.S. Grewal’s Analysis of Financial Statements

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