Cash revenue form operation sRs 100000, Credit revenue from operation Rs 300000 Gross profit 30% on revenue form operation, Inventory turnover ratio = 2times.
Calculate opening inventory and closing inventory in each of the following cases:
Case1: If opening inventory is `1//3`rd of the inventory at the end .
case 2: If closing inventroy is 25% less thanthe inventory in the begining
case 3: If opening inventory is 75% of closing inventory and closing inventory is 30% of revenue form operations.

Explanation

Revenue from operation =cash Revenue from operations
+ credit Revenue from opertions
Cost of Revenue form operations = Revenue form opertions -gross profit
`=Rs 400000-(Rs 400000xx(30)/(100))`
=Rs 400000-Rs 120000=Rs 280000
inventory turnover ratio =`("cost of revenue form operations")/("average inventroy")`
`2=(Rs 280000)/("Average inventroy")`
Average inventory=`(Rs 280000)/(2)=Rs 140000`
Case1: If opening inventory is `1//3` Rs of the inventory at the end
let closing inventory be x
therefore opening inventory =`(1)/(3) of x or (x)/(3)`
Average inventory =(opening inventory+closing inventory)/(2)
`Rs 140000=((x)/(3)+x)/(2)`
`Rs 140000xx2=((x)/(3)+x)`
`Rs 280000=(4x)/(3)`
`4x=R 280000xx3=Rs 840000`
`x=(Rs 840000)/(4)=Rs 210000("Closing inventory")`
therefore opening inventory=(Rs 210000)/(3)=Rs 70000`
Case 2: If closing inventory is 25% less than the inventory in the beginnning
let opening inventory be x
therefore closing inventory =x -0.25x=0.75x
Average inventory=`("opening inventory+closing inventory")/(2) Rs 140000=(x=0.75x)/(2)`
Rs 280000=1.75x
`x=(Rs 280000)/(1.75)=Rs 160000 (opening inventroy)`
therefore closing inventory`=0.75xxRs 160000=Rs 120000`
case 3: if opening inventory is 75% of closing inventory and closing inventory is 30% of revenue from operations
Closing inventroy =30% of revenue from operations
=30% of Rs 400000=Rs 120000
opening inventroy =75% of Rs 120000=Rs 90000