1.

Calculate Inventory Turnover Ratio from the following information:Opening Inventory ₹ 40,000; Purchases ₹ 3,20,000; and Closing Inventory ₹ 1,20,000.State, giving reason, which of the following transactions would (i) increase, (ii) decrease, (iii) neither increase nor decrease the Inventory Turnover Ratio:(a) Sale of goods for ₹ 40,000 (Cost ₹ 32,000).(b) increase in the value of Closing Inventory by ₹ 40,000.(c) Goods purchased for ₹ 80,000.(d) Purchases Return ₹ 20,000.(e) goods costing ₹ 10,000 withdrawn for personal use.(f) Goods costing ₹ 20,000 distributed as free samples.

Answer» Calculate Inventory Turnover Ratio from the following information:

Opening Inventory ₹ 40,000; Purchases ₹ 3,20,000; and Closing Inventory ₹ 1,20,000.

State, giving reason, which of the following transactions would (i) increase, (ii) decrease, (iii) neither increase nor decrease the Inventory Turnover Ratio:

(a) Sale of goods for ₹ 40,000 (Cost ₹ 32,000).

(b) increase in the value of Closing Inventory by ₹ 40,000.

(c) Goods purchased for ₹ 80,000.

(d) Purchases Return ₹ 20,000.

(e) goods costing ₹ 10,000 withdrawn for personal use.

(f) Goods costing ₹ 20,000 distributed as free samples.


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