Question

Rupees 100000 is cost of revenue from operations that is cost of goods sold Inventory turnover ratio is 4 times

Inventory in the beginning is 1.5 times more than the inventory at the end. calculate values of opening and closing inventory
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Answer 1

Answer:

GIVEN THAT

Explanation:

100000/4× 1.5

Answer 2

Explanation:

$inventory \: turn \: over \: ratio = \frac{cost \: of \: sold}{average \: invetory}$

$8 = \frac{30000}{average \: inventory}$

$average \: inventory = rs.37500$

$let \: closing \: inventory \: be \: = x \\ \\ opening \: inventory \: =2x + x \\ \: \: \: \: \: \: \: \: \: \: = 3x$

$average \: inventory = \frac{opening \: invetory + closing \: inventory}{2}$

$37500 = \frac{3x + x}{2} \\ \\ or4x = 75000 \\ \\ x = 18750$

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$closing \: inventory \: = x = rs.18750$

$opening \: inventory = 3x = 3 \times 18750 = rs56250$