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Accountancy · 2023 · 4 marks
CBSE 2023 · Region 5 · Set 2 · Q33
From the following information, calculate the value of opening and closing inventory: Inventory Turnover Ratio - 4 times Gross Profit: 20% on Revenue…
From the following information, calculate the value of opening and closing inventory : Inventory Turnover Ratio - $\displaystyle 4$ times Gross Profit : $\displaystyle 20$% on Revenue from operations Revenue from operations : ₹ $\displaystyle 10,00,000$ Opening inventory is $\displaystyle 25$% of the inventory at the end.
Debt-Equity Ratio of Z Ltd. is $\displaystyle 2$ : 1. State with reason whether the following transactions will improve, decline or will not change the debt-equity ratio : (i) Conversion of ₹ $\displaystyle 3,00,000$, $\displaystyle 9$% debentures into equity shares. (ii) Cash received from debtors ₹ $\displaystyle 1,00$,000. (iii) Redemption of? $\displaystyle 10,00,000$, $\displaystyle 11$% debentures. (iv) Purchase of goods on credit ₹ $\displaystyle 4,00$,000.
Marking-scheme solution
Inventory Turnover Ratio = Cost of Revenue from Operations
Average Inventory
Revenue from Operations = ₹$\displaystyle 10,00,000$
Gross profit = $\displaystyle 20$% of Revenue from Operations
= $\displaystyle 20$% of $\displaystyle 10,00,000$
= ₹$\displaystyle 2,00,000$
Cost of Revenue from Operations = Revenue from Operations – Gross Profit
= $\displaystyle 10,00,000$ – $\displaystyle 2,00,000$
= ₹$\displaystyle 8,00,000$
Now, Inventory Turnover Ratio = $\displaystyle 4$ times
$\displaystyle 4$ = $\displaystyle 8,00,000$
Average Inventory
Average Inventory = ₹$\displaystyle 2,00,000$
Average Inventory = Opening Inventory + Closing Inventory
$\displaystyle 2$
$\displaystyle 2,00,000$ = $\displaystyle 1$/$\displaystyle 4$ Closing Inventory + Closing Inventory
$\displaystyle 2$
$\displaystyle 4,00,000$ = $\displaystyle 1$/$\displaystyle 4$ Closing Inventory + Closing Inventory
$\displaystyle 4,00,000$ = $\displaystyle 5$/$\displaystyle 4$ Closing Inventory
Closing Inventory = ₹$\displaystyle 3,20,000$
Opening Inventory = $\displaystyle 1$/$\displaystyle 4$ x $\displaystyle 3,20,000$
= ₹$\displaystyle 80,000$
Q. Debt-Equity Ratio of Z Ltd. is ……………………….
Ans.
S.N. Effect on Ratio Reason
I Decline Decrease in Debt and Increase in Equity
Ii No Change No change in Debt and No change in Equity
Iii Decline Decrease in Debt and No change in Equity
iv No Change No change in Debt and No change in Equity
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CBSE Class 12 Accountancy past-paper question from the 2023 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.