Question 78 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 78 Chapter 4 of +2-B

Question 78 Chapter 4 of +2-B

Interest Coverage Ratio

78. From the following Statement of Profit and Loss for the year ended 31st
March 2019 of Rex Ltd., calculate Inventory Turnover Ratio:

Statement of Profit and Loss for the year ended 31st March 2019
Particulars Note No. Amount
I. Revenue from Operations (Net Sales)   6,00,000
II. Expenses:    
(a) Purchases of Stock-in-Trade   3,00,000
(b) Change in Inventory of Stock-in-Trade 1 50,000
(c) Employees Benefit Expenses   60,000
(d) Other Expenses 2 45,000
Total Expenses   4,55,000
III. Profit before Tax (I – II)   1,45,000
IV. Less: Tax   45,000
V. Profit after Tax (III – IV)   1,00,000

Notes to Accounts:-

 

Particulars Rs.
I. Change in Inventory of stock-in-Trade  
Opening Inventory  1,25,000
Less: Closing Inventory 75,000
  50,000
2. Other Expenses 60,000
Carriage Inwards 15,000
Miscellaneous Expenses 30,000
  45,000

 

The solution of Question 78 Chapter 4 of +2-B: –

 

Cost of Goods Sold = Opening Inventory+ Purchases +
Direct Expenses – Closing Inventory
  = Rs. 1,25,000 + Rs. 3,00,000 +
Rs. 15,000 – Rs. 75,000
  = Rs. 3,65,000

 

Average Inventory Opening Inventory + Closing Inventory
2
Inventory Turnover Ratio Rs. 1,25,000 + Rs. 75,000
2
  = Rs. 1,00,000
Inventory Turnover Ratio Cost of Goods Sold
Average Inventory
Inventory Turnover Ratio Rs. 3,65,000
Rs. 1,00,000
  = 3.65 Times

 

 

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

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