Question

If opening inventory is Rs 120000.
cost of goods sold is Rs 1000000
and Stock Turnover Ratio is 5
Times, then closing inventory will
be​

Answer 1

Answer:

2 80 000

Explanation:

Inventory Turnover ratio = CORFO/Average Inventory

5=10,00,000/Average Inventory

Average Inventory =  10,00,000/5 = 2,00,000

Average Inventory = Opening Inventory + Closing Inventory/2

2,00,000 = 1,20,000+Closing Inventory/2

4,00,000 - 1,20,000 = Closing Inventory

Closing Inventory = 2,80,000

Have A Good Day Mate :)