SOLUTION
Cost of Goods Sold = Net Sales (Sales – Sales Return) – Gross Profit
= 5,00,000 – 50,000 – 90,000
= Rs. 3,60,000
Closing Inventory = 1,00,000
Closing Inventory is Rs. 20,000 more than the Opening Inventory
Therefore, Opening Inventory = 80,000 (1,00,000 – 20,000)
| Average Stock | Opening Stock + Closing Stock / 2 |
| = 80,000 + 1,00,000 / 2 = 90,000 |
| Stock turnover ratio | Cost of Goods sold / Average Stock |
| = 3,60,000 / 90,000 = 4 Times |