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Question 73 Chapter 4 of +2-B
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Table of Contents
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 |
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| Cost of goods sold | = | Rs. 80,000 x 8 |
| Cost of goods sold | = | Rs. 6,40,000 |
| Gross Profit | = | Rs.6,40,000 | 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 |
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Balance Sheet: Meaning, Format & Examples
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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)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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
