SOLUTION
(i) Opening Inventory = 80,000
Closing Inventory = 1,60,000
Cost of Goods Sold = Opening Inventory + Purchases + Direct Expenses − Closing Inventory
= 80,000 + 4,30,900 + 4,000 − 1,60,000
= 3,54,900
Average Inventory = Opening Inventory + Closing Inventory / 2
= 80,000 + 90,000 / 2
= 1,20,000
Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
= 3,54,000 / 1,20,000
= 2.96 Times
(ii) Sales = 10,00,000
Gross Profit = Net Sales − Cost of Goods Sold
= 10,00,000 − 3,54,900
= 6,45,100
Gross Profit Ratio = Gross profit × 100 / Net Sales
= 645000 × 100 / 10,00,000
= 64.51%
(iii)Operating Expenses = Administration Expenses + Selling and Distribution Expenses
= 21,100 + 40,000
= 61,100
Operating Cost = Cost of Goods Sold+ Operating Expenses
= 3,54,900 + 61,100
= 4,16,000
Operating Ratio = Operating Cost / Net Sales × 100
= 4,16,000 / 10,00,000 × 100
= 41.6%