If opening inventory is ₹1,20,000, Cost of Revenue from Operations is ₹10,00,000 and the Inventory Turnover Ratio is 5 Times, then what will be the Closing Inventory?

₹2,80,000

The correct answer is option 3- ₹2,80,000.

Average inventory = cost of revenue from operations/ inventory turnover ratio
                          = 10,00,000/5
                          = ₹2,00,000

Average inventory = (Opening + closing)/2
           2,00,000   = (1,20,000 + closing)/2
 Closing inventory = 4,00,000 - 1,20,000
                           = ₹2,80,000