STATEMENT OF PROFIT AND LOSS for the year ended 31st March, 2019
Particulars | Note No. | Amount (Rs.) |
I. Revenue from Operations (Net Sales) | 6,00,000 | |
II. Expenses: | ||
(a) Purchases of Stock-in-Trade | 3,00,000 | |
(b) Change in Inventory of Stock-in-Trade | 1 | 50,000 |
(c) Employees Benefit Expenses | 60,000 | |
(d) Other Expenses | 2 | 45,000 |
Total Expenses | 4,55,000 | |
III. Profit before Tax (I-II) | 1,45,000 | |
IV. Less: Tax | 45,000 | |
V. Profit after Tax (III-IV) | 1,00,000 |
Notes to Accounts
Particulars | Amount (Rs.) |
I. Change in Inventory of stock-in-Trade | |
Opening Inventory | 1,25,000 |
Less: Closing Inventory | 75,000 |
50,000 | |
2. Other Expenses | |
Carriage Inwards | 15,000 |
Miscellaneous Expenses | 30,000 |
45,000 |
SOLUTION
Cost of Goods Sold = Opening Inventory + Purchases + Direct Expenses – Closing Inventory
= 1,25,000 + 3,00,000 + 15,000 – 75,000
= Rs. 3,65,000
Average Stock = Opening Stock + Closing Stock / 2
= 1,25,000 + 75,000 / 2
= 2,00,000 / 2
= 1,00,000
Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
= 3,65,000 / 1,00,000
= 3.65 times