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

Question No. 78- Chapter No.4 - T.S. Grewal +2 Book Part 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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