Question 37 Chapter 14 of Class 12 Part – 2 – 2024

37. (Inventory T/O Ratio/Sales, Returns, GP rate given) From the following details, calculate
inventory turnover.
Opening Inventory ₹ 31,000 Closing inventory ₹ 39,000, Credit Sales (Revenue from Operation) ₹ 1,00,000
Cash Sales (Revenue from Operations) 2,00,000 Returns inwards 10,000. Gross Profit Ratio 20%.

The solution of Question 37 Chapter 14 of Class 12 Part – 2 – 2024: –

Inventory Turnover Ratio	=	Cost of goods sold
		Average Inventory

Cost of goods sold	=	Net Total Sales – Gross profit
	=	Cash Sales + Credit Sales – Sales Return
	=	₹ 2,00,000 + ₹ 1,00,000 – ₹ 10,000
	=	₹ 2,90,000
Gross profit	=	20% of Net Total Sales
Net Total Sales	=	₹ 2,90,000

Gross profit	=	₹ 2,90,000 x	X	20
				100
	=	₹ 58,000

Cost of goods sold	=	Net Total Sales – Gross profit
	=	₹ 2,90,000 – ₹ 58,000
	=	₹ 2,32,000

Debt Equity Ratio	=	Opening Inventory – Closing Inventory
		2
	=	₹ 31,000 – ₹ 39,000
		2
	=	₹ 35,000

Inventory Turnover Ratio	=	₹ 2,32,000
		₹ 35,000
	=	6.62 Times

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