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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Question 108 Chapter 14 of Class 12 Part – 2 – 2024
Miscellaneous (Analytical Questions)
108. (GP Ratio/Inventory T/O Ratio/Proprietary Ratio) The following are the Summarised Profit and Loss Account and the Balance Sheet of Ashoka Ltd.
| STATEMENT OF PROFIT AND LOSS | ||
| FOR THE YEAR. ENDING 31ST MARCH, 2018 | ||
| Particulars | ₹ | |
| Revenue from Operations | 2,20,000 | |
| Less: Expenses | ||
| Purchases | 1,25,000 | |
| Change in Inventories (Opening Stock — Closing Stock) ( ₹ 20,000 - ₹ 10,000) | 10,000 | |
| Direct Expenses | 15,000 | |
| Salary | 16,000 | |
| Loss on Sale of Machinery | 4,000 | 1,70,000 |
| Net Profit | 50,000 |
| BALANCE SHEET | |
| (AS AT 31st MARCH, 2018) | |
| Particulars | ₹ |
| I. Equity and Liabilities | |
| Shareholders' Funds | |
| Share Capital | |
| Equity Share Capital | 1,50,000 |
| Reserves and Surplus | |
| Surplus in Statement of Profit and Loss | 50,000 |
| Current Liabilities | |
| Trade Payable | 75,000 |
| Outstanding Expenses | 25,000 |
| 3,00,000 | |
| II. Assets : | |
| Non-Current Assets | |
| Tangible Assets | |
| Land | 2,00,000 |
| Current Assets | |
| Inventory | 10,000 |
| Trade Receivable | 50,000 |
| Bank | 40,000 |
| 3,00,000 |
| (i) Gross Profit Ratio | = | Gross Profit | X | 100 |
| Net Sales | ||||
| = | ₹ 70,000 | X | 100 | |
| ₹ 2,20,000 | ||||
| = | 31.8% |
| (ii) Inventory Turnover Ratio | = | Cost of goods sold |
| Average Inventory | ||
| = | ₹ 1,50,000 | |
| ₹ 15,000 | ||
| = | 10 times |
| (iii) Proprietary Ratio | = | Shareholders’ Funds | ||
| Total Assets | ||||
| = | ₹ 2,00,000 | x | 100 | |
| ₹ 3,00,000 | ||||
| = | 66.66% |
Working Notes :
| Gross Profit | = | Sales - Cost of goods sold |
| = | ₹ 2,20,000 - ₹ 1,50,000 | |
| = | ₹ 70,000 | |
| Cost of goods sold | = | Purchases + Direct Expenses – Change in inventory |
| = | ₹ 1,25,000 + ₹ 15,000 + ₹ 10,000 | |
| = | ₹ 1,50,000 | |
| Shareholders’ Funds | = | Equity Share Capital + Profit And Loss |
| = | ₹ 1,50,000 + ₹ 50,000 | |
| = | ₹ 2,00,000 |
| Average Inventory | = | Opening Inventory + Closing Inventory |
| 2 | ||
| = | ₹ 20,000 + ₹ 10,000 | |
| 2 | ||
| = | ₹ 15,000 |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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