30. From the following information, calculate Inventory Turnover Ratio :
Total Sales 6,25,000; Sales Return $25,000; Gross Loss on Sales 10%; Closing
Inventory 70,000; Excess of Closing Inventory over Opening Inventory 40,000.
Answers
Answer:
Inventory turnover ratio = Cost of goods sold ( WN 1)
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Average inventory (WN 2)
= 3,60,000
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90,000
= 4 Times
Working notes:-
1) Cost of goods sold = Gross sales - (Sales return + gross profit)
= 5,00,000 - (50,000 + 90,000)
= 3,60,000.
2) Average Inventory = 1,00,000 + 80,000
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2
= 90,000.
Closing inventory is 20,000 more than opening inventory hence opening inventory is 1,00,000 - 20,000 = 80,000.
Explanation:
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