Multiple Choice Questions on Cost of revenue from operations Rs6 00 000 Inventory Turnover Ratio 5 Find out the value of opening ........... for Commerce 12th Preparation

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Multiple Choice Questions

Cost of revenue from operations Rs6 00 000 Inventory Turnover Ratio 5 Find out the value of opening ...........

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    Cost of revenue from operations Rs6,00,000; Inventory Turnover Ratio 5; Find out the value of opening inventory, if opening inventory is Rs8,000 less than ” the closing inventory.

    Rs1,12,000

    Incorrect Answer

    Rs1,16,000

    Correct Answer

    Rs1,28,000

    Incorrect Answer

    Rs1,24,000

    Incorrect Answer
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    Explanation:

    - The Inventory Turnover Ratio is calculated as the Cost of Goods Sold (COGS) divided by the Average Inventory.

    - Here, COGS is Rs 6,00,000 and the Inventory Turnover Ratio is 5, so Average Inventory = Rs 6,00,000 / 5 = Rs 1,20,000.

    - Let the closing inventory be x. Then, the opening inventory = x - Rs 8,000.

    - Average Inventory = (Opening Inventory + Closing Inventory) / 2

    - Rs 1,20,000 = (x - Rs 8,000 + x) / 2

    - Solving this equation: 2(Rs 1,20,000) = 2x - Rs 8,000, results in 2x = Rs 2,40,000 + Rs 8,000 = Rs 2,48,000, thus x = Rs 1,24,000.

    - Therefore, Opening Inventory = Rs 1,24,000 - Rs 8,000 = Rs 1,16,000.

    Correct Answer: Rs 1,16,000

    By: santosh
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