Question 99 Chapter 4 of +2-B
Table of Contents
Working Capital Turnover
99. Gross Profit at 25% on cost; Gross profit Rs. 5,00,000; Equity Share Capital Rs. 10,00,000; Reserves and Surplus Rs. 2,00,000; Long-term Loan Rs. 3,00,000; Fixed Assets (Net) Rs. 10,00,000.
Calculate Working Capital Turnover Ratio.
The solution of Question 99 Chapter 4 of +2-B: –
| Gross Profit | = | 25% on Cost |
| Cost of Goods Sold | = | X |
| Gross Profit | = | X | + | 25 |
| 3 |
| Gross Profit | = | 25x |
| 100 |
| Rs. 5,00,000 x 100 | = | 25x |
| X | = | Rs.5,00,00,000 |
| 25 | ||
| X | = | Rs. 20,00,000 |
| Net Sales | = | Cost of Goods Sold + Gross Profit |
| = | Rs. 20,00,000 + Rs. 5,00,000 | |
| = | Rs. 25,00,000 | |
| Working Capital | = | Capital Employed – Fixed Assets |
| = | Rs. 15,00,000 – Rs. 10,00,000 | |
| = | Rs. 5,00,000 |
| Working Capital Turnover Ratio | = | Cost of Goods Sold |
| Working Capital |
| = | Rs. 25,00,000 | |
| Rs. 5,00,000 | ||
| = | 5 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)
- 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
