Accountancy

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 ParticularsNote No.Amount(Rs.)I. Revenue from Operations (Net Sales)6,00,000II. Expenses:(a) Purchases of Stock-in-Trade3,00,000(b) Change in Inventory of Stock-in-Trade150,000(c) Employees Benefit Expenses60,000(d)…

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

Calculate Inventory Turnover Ratio in each of the following alternative cases: Case 1: Cash Sales 25% of Credit Sales; Credit Sales Rs. 3,00,000; Gross Profit 20% on Revenue from Operations, i.e., Net Sales; Closing Inventory Rs. 1,60,000; Opening Inventory Rs. 40,000. Case 2:  Cash Sales 20% of Total Sales; Credit Sales Rs. 4,50,000; Gross Profit 25% on Cost; Opening Inventory Rs. 37,500; Closing Inventory Rs. 1,12,500.

SOLUTION Case 1 Credit Sales = 3,00,000Cash sales = 25% of Credit SalesCash Sales =3,00,000 × 25 / 100 =75,000 Total Sales = Cash Sales + Credit Sales= 3,00,000 + 75,000= 3,75,000…

Continue ReadingCalculate Inventory Turnover Ratio in each of the following alternative cases: Case 1: Cash Sales 25% of Credit Sales; Credit Sales Rs. 3,00,000; Gross Profit 20% on Revenue from Operations, i.e., Net Sales; Closing Inventory Rs. 1,60,000; Opening Inventory Rs. 40,000. Case 2:  Cash Sales 20% of Total Sales; Credit Sales Rs. 4,50,000; Gross Profit 25% on Cost; Opening Inventory Rs. 37,500; Closing Inventory Rs. 1,12,500.

From the following Information, calculate Inventory Turnover Ratio: Credit Revenue from Operations Rs. 3,00,000; Cash Revenue from Operations Rs. 1,00,000, Gross Profit 25% of Cost, Closing Inventory was 3 times the Opening Inventory. Opening Inventory was 10% of Cost of Revenue from Operations.

SOLUTION Average Inventory = 30,000 + 90,0002= Rs. 60,000Opening Inventory = 3,00,000 × 10%= Rs. 30,000Closing Inventory = 30,000 × 3= Rs. 90,000 Cost of Revenue from Operations = Revenue from Operations - Gross Profit= 4,00,000 - 1,00,000= Rs. 3,00,000 Inventory Turnover Ratio = Cost of Revenue from Operations /…

Continue ReadingFrom the following Information, calculate Inventory Turnover Ratio: Credit Revenue from Operations Rs. 3,00,000; Cash Revenue from Operations Rs. 1,00,000, Gross Profit 25% of Cost, Closing Inventory was 3 times the Opening Inventory. Opening Inventory was 10% of Cost of Revenue from Operations.

Rs. 3,00,000 is the Cost of Revenue from Operations (Cost of Goods Sold). Inventory Turnover Ratio 8 times; Inventory in the beginning is 2 times more than the inventory at the end. Calculate value of Opening and Closing Inventories

SOLUTION Inventory Turnover Ratio = Cost of Goods sold / Average Inventory8 = 3,00,000 / Average InventoryAverage Inventory = Rs. 37,500Let Closing Inventory = xOpening Inventory = 2x + x=…

Continue ReadingRs. 3,00,000 is the Cost of Revenue from Operations (Cost of Goods Sold). Inventory Turnover Ratio 8 times; Inventory in the beginning is 2 times more than the inventory at the end. Calculate value of Opening and Closing Inventories

Inventory Turnover Ratio 5 times; Cost of Revenue from Operations (Cost of Goods Sold) Rs. 18,90,000. Calculate Opening Inventory and Closing Inventory if Inventory at the end is 2.5 times more than that in the beginning.

SOLUTION Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory5 = 18,90,000 / Average InventoryAverage Inventory = Rs. 3,78,000 Let Opening Inventory = xClosing Inventory = 2.5x +…

Continue ReadingInventory Turnover Ratio 5 times; Cost of Revenue from Operations (Cost of Goods Sold) Rs. 18,90,000. Calculate Opening Inventory and Closing Inventory if Inventory at the end is 2.5 times more than that in the beginning.

Following figures have been extracted from Shivalika Mills Ltd :- Inventory in the beginning of the year Rs. 60,000. Inventory at the end of the year Rs. 1,00,000.  Inventory Turnover Ratio 8 times. Selling price 25% above cost. Compute amount of Gross Profit and Revenue from Operations (Net Sales).

SOLUTION Average Inventory = Opening Inventory + Closing Inventory / 2= 60,000 + 1,00,000 / 2= 80,000 Inventory turnover ratio = Cost of goods sold / Average Stock8 = Cost of…

Continue ReadingFollowing figures have been extracted from Shivalika Mills Ltd :- Inventory in the beginning of the year Rs. 60,000. Inventory at the end of the year Rs. 1,00,000.  Inventory Turnover Ratio 8 times. Selling price 25% above cost. Compute amount of Gross Profit and Revenue from Operations (Net Sales).

From the following information, determine Opening and Closing inventories: Inventory Turnover Ratio 5 Times, Total sales Rs. 2,00,000, Gross Profit Ratio 25%. Closing Inventory is more by Rs. 4,000 than the Opening Inventory.

SOLUTION Sales = 2,00,000Gross Profit = 25% on Sales∴ Gross Profit = 2,00,000 × 25 / 100= 50,000 Cost of Goods Sold = Total Sales − Gross Profit= 2,00,000 −…

Continue ReadingFrom the following information, determine Opening and Closing inventories: Inventory Turnover Ratio 5 Times, Total sales Rs. 2,00,000, Gross Profit Ratio 25%. Closing Inventory is more by Rs. 4,000 than the Opening Inventory.