Changes in Trade Payables

Q. From the following information, calculate value of Opening Inventory:

Closing Inventory	=	₹ 68, 000
Total Sales	=	₹ 4, 80, 000 (including Cash Sales ₹ 1, 20, 000)
Total Purchases	=	₹ 3, 60, 000 (including Credit Purchases ₹ 2, 39, 200)

Goods are sold at a profit of 25% on cost.

Q. State giving reason, whether the Current Ratio will improve or decline or will have no effect in each of the following transactions if Current Ratio is 2:1:
(a) Cash paid to Trade Payables.
(b) Bills Payable discharged.
(c) Bills Receivable endorsed to a creditor.
(d) Payment of final Dividend already declared.
(e) Purchase of Stock-in-Trade on credit.
(f) Bills Receivable endorsed to a Creditor dishonoured.
(g) Purchases of Stock-in-Trade for cash.
(h) Sale of Fixed Assets (Book Value of ₹50, 000) for ₹45, 000.
(i) Sale of FIxed Assets (Book Value of ₹50, 000) for ₹60, 000.

Q. Calculate Gross Profit Ratio from the following data:
Cash Sales are 20% of Total Sales; Credit Sales are ₹5, 00, 000; Purchases are ₹4, 00, 000; Excess of Closing Inventory over Opening Inventory ₹25, 000.

Q. Calculate Inventory Turnover Ratio from the following information:
Opening Inventory is ₹50, 000; Purchases ₹3, 90, 000; Revenue from Operations, i.e., Net Sales ₹6, 00, 000; Gross Profit Ratio 30%.

Q. Calculate Operating Profit Ratio from the following information:

Opening Inventory	₹1, 00, 000		Closing Inventory	₹1, 50, 000
Purchases	₹ 10, 00, 000		Loss by fire	₹ 20, 000
Revenue from Operations, i.e., Net Sales	₹ 14, 70, 000		Dividend Received	₹ 30, 000
Administrative and Selling Expenses	₹ 1, 70, 000

Q. From the following information, determine Opening and Closing inventories:

Inventory Turnover Ratio 5 Times, Total sales ₹ 2, 00, 000, Gross Profit Ratio 25%. Closing Inventory is more by ₹ 4, 000 than the Opening Inventory.

Q. From the following information, calculate Gross Profit Ratio:

	₹			₹
Credit Sales	5, 00, 000		Decrease in Inventory	10, 000
Purchases	3, 00, 000		Returns Outward	10, 000
Carriage Inwards	10, 000		Wages	50, 000
			Rate of Credit Sale to Cash Sale	4:1

Q. Following information is given about a company:

	₹			₹
Revenue From Operations, i.e., Net Sales Gross Profit	1, 50, 000		Opening Inventory	29, 000
Cost of Revenue From Operations	30, 000		Closing Inventory	31, 000
(Cost of Goods Sold)	1, 20, 000		Debtors	16, 000

From the above information, calculate following ratios:

Q. Calculate Operating Profit Ratio, in each of the following alternative cases:
Case 1: Revenue from Operations (Net Sales) ₹ 10, 00, 000; Operating Profit ₹ 1, 50, 000.
Case 2: Revenue from Operations (Net Sales) ₹ 6, 00, 000; Operating Cost ₹ 5, 10, 000.
Case 4: Revenue from Operations (Net Sales) ₹ 3, 60, 000; Gross Profit 20% on Sales; Operating Expenses ₹ 18, 000
Case 4: Revenue from Operations (Net Sales) ₹ 4, 50, 000; Cost of Revenue from Operations ₹ 3, 60, 000; Operating Expenses ₹ 22, 500.
Case 5: Cost of Goods Sold, i.e., Cost of Revenue from Operations ₹ 8, 00, 000; Gross Profit 20% on Sales; Operating Expenses ₹ 50, 000.

Q. Closing Trade Receivables ₹ 1, 00, 000; Cash Sales being 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables ₹ 40, 000; Revenue from Operations, i.e., Net Sales ₹ 6, 00, 000. Calculate Trade Receivables Turnover Ratio.

Q. ₹ 3, 00, 000 is the Cost of Revenue from Operations (Cost of Goods Sold).

Inventory Turnover Ratio 8 times; Inventory in the beginning is 2 times more than the inventory at the end. Calculate value of Opening and Closing Inventories

Q. Calculate Inventory Turnover Ratio from the following:

	₹
Opening Inventory	29, 000
Closing Inventory	31, 000
Revenue from Operations, i.e., Sales	3, 20, 000
Gross Profit Ratio 25%

Q. From the following information, calculate Operating Ratio:

Cost of Revenue			Revenue from Operation:
from Operations (Cost of Goods Sold)	₹52, 000		Gross Sales	₹ 88, 000
Operating Expenses	₹18, 000		Sales Return	₹ 8, 000

Q. Revenue from Operations ₹4, 00, 000; Gross Profit ₹1, 00, 000; Closing Inventory ₹1, 20, 000; Excess of Closing Inventory over Opening Inventory ₹40, 000. Calculate Inventory Turnover Ratio.

Q. From the following data, calculate Inventory Turnover Ratio:
Total Sales ₹5, 00, 000; Sales Return ₹50, 000; Gross Profit ₹90, 000; Closing Inventory ₹1, 00, 000; Excess of Closing Inventory over Opening Inventory ₹20, 000.

Q. From the following, calculate Gross Profit Ratio:
Gross Profit:₹50, 000; Revenue from Operations ₹5, 00, 000; Sales Return: ₹50, 000.

Q. Calculate Cost of Revenue from Operations from the following information:
Revenue from Operations ₹ 12, 00, 000; Operating Ratio 75%; Operating Expenses ₹ 1, 00, 000.

Q. Calculate Trade Receivables Turnover Ratio in each of the following alternative cases:
Case 1: Net Credit Sales ₹4, 00, 000; Average Trade Receivables ₹1, 00, 000.
Case 2: Revenue from Operations (Net Sales) ₹30, 00, 000; Cash Revenue from Operations, i.e., Cash Sales ₹6, 00, 000; Opening Trade Receivables ₹2, 00, 000; Closing Trade Receivables ₹6, 00, 000.
Case 3: Cost of Revenue from Operations or Cost of Goods Sold ₹3, 00, 000; Gross Profit on Cost 25%; Cash Sales 20% of Total Sales; Opening Trade Receivables ₹50, 000; Closing Trade Receivables ₹1, 00, 000.
Case 4: Cost of Revenue from Operations or Cost of Goods Sold ₹4, 50, 000; Gross Profit on Sales 20%; Cash Sales 25% of Net Credit Sales, Opening Trade Receivables ₹90, 000; Closing Trade Receivables ₹60, 000.

Q. Following figures have been extracted from Shivalika Mills Ltd.:

Q.

Calculate Operating Ratio from the following information:
Operating Cost ₹ 6, 80, 000; Gross Profit 25%; Operating Expenses ₹ 80, 000.

Q.

Closing Trade Receivables ₹ 4, 00, 000; Cash Sales being 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables ₹ 2, 00, 000; Revenue from Operations, i.e., Revenue from Operations, i.e., Net Sales ₹ 15, 00, 000. Calculate Trade Receivables Turnover Ratio

[Hint: 1. Net Credit Sales = Total Sales − Cash Sales

2. Opening Trade Receivables = Closing Trade Receivables − Excess of Closing Trade Receivables over Opening Trade Receivables.]

Q. Operating Ratio 92%; Operating Expenses ₹94, 000; Revenue from Operations ₹6, 00, 000; Sales Return ₹40, 000. Calculate Cost of Revenue from Operations (Cost of Goods Sold).

Q. Cost of Revenue from Operations (Cost of Goods Sold) ₹5, 00, 000; Purchases ₹5, 50, 000; Opening Inventory ₹1, 00, 000.
Calculate Inventory Turnover Ratio.

Q. Gross Profit Ratio of a company is 25%. State giving reason, which of the following transactions will (a) increase or (b) decrease or (c) not alter the Gross Profit Ratio.
(i) Purchases of Stock-in-Trade ₹50, 000.
(ii) Purchases Return ₹15, 000.
(iii) Cash Sale of Stock-in-Trade ₹40, 000.
(iv) Stock-in-Trade costing ₹20, 000 withdrawn for personal use.
(v) Stock-in-Trade costing ₹15, 000 distributed as free sample.

Q. From the following information of Hospitality Ltd. for the year ended 31st March, 2018, calculate amount that will be shown in the Note to Accounts on Changes in inventiories of Finished Goods, WIP and stock-in-Trade:

Particluars	Opening Inventory (₹)		Closing inventory(₹)
Finished Goods	5, 00, 000		5, 50, 000
Work-in-Progress	4, 50, 000		4, 25, 000
Stock-in-Trade	6, 50, 000		6, 00, 000

Q. From the following details, calculate Inventory Turnover Ratio:

	₹
Cost of Revenue from Operations (Cost of Goods Sold)	4, 50, 000
Inventory in the beginning of the year	1, 25, 000
Inventory at the close of the year	1, 75, 000

Q. Revenue from Operations, i.e., Net Sales ₹ 6, 00, 000. Calculate Net Profit Ratio.

Q. Deepak Ltd purchased furniture of ₹ 2, 20, 000 from M/s. Furniture Mart. 50% of the amount was paid to M/s. Furniture Mart by accepting a Bill of Exchanged and for the balance the company issued 9% Debenture of ​₹ 100 each at a premium of 10% in favour of M/s. Furniture Mart.
Pass Journal entries in the books of Deepak Ltd.

Q. From the following information, calculate Change in Inventory of Finished Goods: Opening Inventory and Closing Inventory of Finished Goods ₹2, 00, 000 and ₹1, 75, 000 respectively.

Q. Compute Gross Profit Ratio from the following information:
Revenue from Operations, i.e., Net Sales = ₹4, 00, 000; Gross Profit 25% on Cost.