T S Grewal Solutions 2026-27 [Class 12] – Ratio Analysis– Q 81 to 90

Solution for Q 81 to 90 of Chapter 4 of Book 3 - Analysis of Financial Statements of T S Grewal Class 12 Accountancy 2026-27 are given below. The Chapter name is Ratio Analysis class 12. These Solutions are based on topics turnover ratios which include inventory turnover ratio, finding opening and closing inventory, gropp profit ratio when investory turnover ratio is given, finding the impact of business transactions on the inventory turnover ratio, using gross profit ratio to find the inventory turnover ratio.

Working notes are given with each solution. These help in understanding the steps and are also important for board exams as marks are given for steps.Debt equity ratio is a key ratio is finfing the long term solvency of any business and is critical business health parameter. A higher debt equity ratio is generally considered unhealthy for business as it indicates higher dependency on external funds and future solvency problems may arise.

These solutions are also useful for CA Foundation, CS Foundation and CMA Foundation students. The solutions will be helpful for students as well as teachers teaching class 12 accounts.

Question 81

Step 1
Cost of Goods Sold	=	Revenue from Operations			-	Gross Profit

	=	600000			-	(600000 X 30/100)
		600000			-	180000

	=	420000

Step 2
Cost of Goods Sold	=	Opening Inventory		+	Purchases		-	Closing Inventory
420000	=	50000			390000			CI

Closing Inventory	=	Opening Inventory		+	Purchases		-	Cost of Goods Sold
		50000			390000			420000

	=	20000

Step 3
Average Inventory	=	(Opening Inventory			+	Closing Inventory)		/	2
		50000			+	20000

	=	35000

Step 4
Inventory Turnover Ratio	=	Cost of Goods Sold			/	Average Inventory
		420000			/	35000

	=	12	Times

▶ Video Solution: Coming Soon

Question 82

Step 1
Cost of Goods Sold	=	Opening	+	Purchases	-	Closing	+	Direct
		Inventory				Inventory		Expenses
								(Carriage Inwards + Wages)
	=	200000	+	460000		60000	+	50000

	=	650000

Step 2
Average Inventory	=	(Opening Inventory			+	Closing Inventory)		/	2
		200000			+	60000

	=	130000

Step 3
Inventory Turnover	=	Cost of Goods Sold			/	Average Inventory
Ratio		650000			/	130000

	=	5	Times

▶ Video Solution: Coming Soon

Question 83

Step 1
Cost of Goods Sold	=	Revenue from Operations		-	Gross Profit

	=	640000		-	(640000 X 25/100)
		640000		-	160000

	=	480000

Step 2
Average Inventory	=	(Opening Inventory		+	Closing Inventory)	/	2
		58000		+	62000

	=	60000

Step 3
Inventory Turnover Ratio	=	Cost of Goods Sold		/	Average Inventory
		480000		/	60000

	=	8	Times

▶ Video Solution: Coming Soon

Question 84

Step 1

Cost of Goods Sold	=	Revenue from Operations	-	Gross Profit

Note : In this question there is gross loss instead of gross profit so we will write GP in -ive

Cost of Goods Sold	=	Revenue from Operations	-	Gross Profit

	=	1600000	-	-(1600000 X 5/100)

		1600000	-	(-80000)

Note : When we will open bracket then negative and negative will become positive

	=	1600000		+	80000

	=	1680000

Step 2
Inventory Turnover Ratio	=	Cost of Goods Sold		/	Average Inventory
		1680000		/	220000

	=	7.64	Times

▶ Video Solution: Coming Soon

Question 85

Step 1
Cost of Goods Sold	=	Revenue from Operations		-	Gross Profit

	=	400000		-	100000

	=	300000

Step 2
Closing Inventory	=	120000

Opening Inventory	=	Closing Inventory		-	40000
		120000		-	40000

	=	80000

Step 3
Average Inventory	=	(Opening Inventory		+	Closing Inventory)	/	2
		80000		+	120000

	=	100000

Step 3
Inventory Turnover Ratio	=	Cost of Goods Sold		/	Average Inventory
		300000		/	100000

	=	3	Times

▶ Video Solution: Coming Soon

Question 86

Step 1
Cost of Goods Sold	=	Revenue from Operations		-	Gross Profit

	=	900000		-	180000
		(1000000-100000)

	=	720000

Note : Revenue from operations = Sales Less Sales Return

Step 2
Closing Inventory	=	200000
So
Opening Inventory	=	Closing Inventory		-	40000
		200000		-	40000

	=	160000

Step 3
Average Inventory	=	(Opening Inventory		+	Closing Inventory)	/	2
		160000		+	200000

	=	180000

Step 3
Inventory Turnover Ratio	=	Cost of Goods Sold		/	Average Inventory
		720000		/	180000

	=	4	Times

▶ Video Solution: Coming Soon

Question 87

Step 1
Inventory Turnover Ratio		=	Cost of Goods Sold	/	Average Inventory
	8		200000	/	AI

Average Inventory		=	Cost of Goods Sold	/	Inventory Turnover Ratio
			200000	/		8

		=	25000

Step 2

Let the inventory at the beginning of the year be x

So the inventory at the end of the year will be 1.5x

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

25000		x		+	1.5x	/	2

Solve this equation for x

2.5x	=		50000

x	=		50000	/	2.5

	=		20000

Inventory at the end	=		20000
of the year

Inventory at the	=		20000	X	1.5
beginning of the year
	=		30000

▶ Video Solution: Coming Soon

Question 88

2015-2016
Step 1
Cost of Goods Sold	=	Revenue from Operations	-	Gross Profit (As below)
	=	5000000	-	1000000

	=	4000000

Gross Profit :
Let the cost be Rs 100		Then Gross Profit is Rs 25		Revenue from operations Rs 125

Now we have to find Gross profit from revenue from operations
So we keep Gross profit as numerator and Revenue from operations as denominator
(What we have to find is kept as numerator and what we know is kept as denominator)

	Revenue			Gross Profit
	125		=	25
	1		=	25 / 125
	5000000		=	25 / 125 X 5000000

			=	1000000

Step 2
Average Inventory		=	(Opening Inventory		+	Closing Inventory)	/	2
			500000		+	700000

		=	600000

Step 3
Inventory Turnover Ratio		=	Cost of Goods Sold		/	Average Inventory
			4000000		/	600000

		=	6.67	Times

2016-2017
Step 1
Cost of Goods Sold	=	Revenue from Operations	-	Gross Profit (As below)
	=	7500000	-	1500000

	=	6000000

Gross Profit :
Let the cost be Rs 100		Then Gross Profit is Rs 25		Revenue from operations Rs 125

Now we have to find Gross profit from revenue from operations
So we keep Gross profit on RHS and Revenue form operations on LHS

	Revenue			Gross Profit
	125		=	25
	1		=	25/125
	5000000		=	25/125X7500000

			=	1500000

Step 2
Average Inventory		=	(Opening Inventory		+	Closing Inventory)	/	2
			700000		+	1700000

		=	1200000

Note : Closing inventory of last year will be the opening inventory of the current year

Step 3
Inventory Turnover Ratio	=	Cost of Goods Sold		/	Average Inventory
		6000000		/	1200000

	=	5	Times

▶ Video Solution: Coming Soon

Question 89

Step 1
Cost of Goods Sold	=	Opening Inventory		+	Purchases		-	Closing Inventory
		40000			320000			120000

	=	240000

Step 2
Average Inventory	=	(Opening Inventory			+	Closing Inventory)		/	2
		40000			+	120000

	=	80000

Step 3
Inventory Turnover Ratio	=	Cost of Goods Sold			/	Average Inventory
		240000			/	80000

	=	3	Times

Here, basically we have to see the impact of transaction on opening Stock, closing stock and purchases

(a)	Impact of the Transaction

	Original	Impact	Revised
Opening Inventory	40000	0	40000
Closing Inventory	120000	-32000	88000
Purchases	320000	0	320000

Average Inventory	80000		64000	(Op Inv + Cl Inv) / 2
Cost of Goods Sold	240000	32000	272000	(Op Inv + Purchases - Cl Inv)

	Note : Inventory is always valued at cost so we will deduct Rs 32000 and not Rs 40000 (as this also include profit)

	Inventory	=	Cost of Goods Sold			/	Average Inventory
	Turnover Ratio		272000			/	64000
							(40000+88000)/2

		=	4.25	Times	So, Increase

(b)	Impact of the Transaction

	Original	Impact	Revised
Opening Inventory	40000	0	40000
Closing Inventory	120000	40000	160000	100000
Purchases	320000	0	320000

Average Inventory	80000		100000	(Op Inv + Cl Inv) / 2
Cost of Goods Sold	240000	-40000	200000	(Op Inv + Purchases - Cl Inv)

	Note : Increase in closing inventory will not affect purchases and opening stock, hence Cost of Goods
	sold will decrease

	Inventory	=	Cost of Goods Sold			/	Average Inventory
	Turnover Ratio		200000			/	100000	(40000+160000)/2

		=	2	Times	So, Decrease

(c)	Impact of the Transaction

	Original	Impact	Revised
Opening Inventory	40000	0	40000
Closing Inventory	120000	80000	200000
Purchases	320000	80000	400000

Average Inventory	80000		120000	(Op Inv + Cl Inv) / 2
Cost of Goods Sold	240000		240000	(Op Inv + Purchases - Cl Inv)

	Note : Goods purchased will also increase the closing inventory

	Inventory	=	Cost of Goods Sold			/	Average Inventory
	Turnover Ratio		240000			/	120000
							(40000+200000)/2

		=	2	Times	So, Decrease

(d)	Impact of the Transaction
			Original	Impact	Revised

Opening Inventory	40000	0	40000
Closing Inventory	120000	-20000	100000
Purchases	320000	-20000	300000
Average Inventory	80000		70000
Cost of Goods Sold	240000		240000

	Note : Purchase return will also decrease the closing inventory

	Inventory	=	Cost of Goods Sold			/	Average Inventory
	Turnover Ratio		240000			/	70000
							(40000+100000)/2
		=	3.43	Times	So, Increase

(e)	Impact of the Transaction
			Original	Impact	Revised

Opening Inventory	40000	0	40000
Closing Inventory	120000	-10000	110000
Purchases	320000	-10000	310000
Average Inventory	80000		75000
Cost of Goods Sold	240000		240000

	Note : Goods withdrawn for personal use is reduced from purchases (Refer Class XI final A/c's chapter)

	Inventory	=	Cost of Goods Sold			/	Average Inventory
	Turnover Ratio		240000			/	75000
							(40000+110000)/2
		=	3.2	Times	So, Increase

(f)	Impact of the Transaction
			Original	Impact	Revised

Opening Inventory	40000	0	40000
Closing Inventory	120000	-20000	100000
Purchases	320000	-20000	300000
Average Inventory	80000		70000
Cost of Goods Sold	240000		240000

Note : Goods distributed as free samples is reduced from purchases (Refer Class XI final A/c's chapter)

Inventory	=	Cost of Goods Sold			/	Average Inventory
Turnover Ratio		240000			/	70000

	=	3.43	Times	So, Increase

▶ Video Solution: Coming Soon

Question 90

Step 1
Total revenue from operations				=	Credit Revenue	+	Cash Revenue
					600000	+	200000

				=	800000

Step 2
Gross Profit		=	25% of Cost

Let the cost be Rs 100				Gross Profit will be Rs 25			Revenue will be Rs 125

Now we have to find Gross profit from revenue from operations
So we keep Gross profit as numerator and Revenue form operations as denominator
(What we have to find is kept as numerator and what we know is kept as denominator)

	Revenue				Gross Profit
	125			=	25
	1			=	25/125
	800000			=	25/125X800000

				=	160000

Step 3
Cost of Goods Sold			=	Revenue from Operations		-	Gross Profit (As above)
			=	800000		-	160000

			=	640000

Step 4
Opening Inventory			=	Cost of Revenue from Operations			X	10%
					640000		X	10%

			=		64000

Step 5
Closing Inventory			=	Opening Inventory		X	3
				64000		X	3

			=	192000

Average Inventory			=	(Opening Inventory		+	Closing Inventory)		/	2
				64000		+	192000		/	2

			=	128000

Step 6
Inventory Turnover Ratio			=	Cost of Goods Sold		/	Average Inventory
				640000		/	128000

			=	5	Times

▶ Video Solution: Coming Soon

Related Posts

Leave a Comment Cancel Reply