q50482a : From the following balance sheet, calculate turnover ratios :

Liabilities Rs. Assets Rs.
Share Capital 80000 Fixed Assets 150000
Profit and Loss Account 80000 Debtors 60000
15% Mortgage loan 70000 Bills receivables 20000
Creditors 50000 Stock 40000
Bills Payable 20000 Cash at Bank 20000
    Priliminary expenses 10000
300000   300000  

Sales during the year amounted to Rs. 60000 which yielded a gross profit of 20%. Receivables at the beginning Rs. 70000 and payables at the end Rs. 60000, Opening stock Rs. 30000.

Question based on AU Solved Assignment and other course

Solution :

Cost of goods sold = Rs. 160000 – 32000 = 128000

Capital employed = Rs. 150000 + 60000 + 20000 + 40000 + 20000 – (50000 + 20000) = 220000

Average stock = (30000 + 40000) / 2 = Rs. 35000

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Cost of goods sold =Opening stock + Purchases – Closing stock 128000 = 30000+Purchases-40000
Purchases =Rs. 138000
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