Question 74 Chapter 4 of +2-B
Table of Contents
Interest Coverage Ratio
74. Inventory Turnover Ratio 5 times; Cost of Revenue from Operations
(Cost of Goods Sold) Rs. 18,90,000. Calculate Opening Inventory and Closing Inventory if Inventory at the end is 2.5 times more than that in the beginning.
The solution of Question 74 Chapter 4 of +2-B: –
| Inventory Turnover Ratio | = | Cost of goods sold |
| Average Inventory |
| 5 | = | Rs. 18,90,000 |
| Average Inventory | ||
| Average Inventory | = | Rs. 18,90,000 / 5 |
| Average Inventory | = | Rs. 3,78,000 |
| Opening Inventory | = | X |
| Closing Inventory | = | 2.5x + x |
| Average Inventory | = | Opening Inventory + Closing Inventory |
| 2 |
| Rs. 3,78,000 | = | X + (2.5x + X) |
| 2 |
| 4.5x | = | Rs. 7,56,000 |
| X | = | Rs. 7,56,000 |
| 4.5 | ||
| = | Rs. 1,68,000 |
| Opening Inventory | = | Rs. 1,68,000 |
| Closing Inventory | = | 3.5 x Rs. 1,68,000 |
| = | Rs. 5,88,000 |
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)
- 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
