Question 110 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 110 Chapter 4 of +2-B

Gross Profit Ratio

110. Gross Profit Ratio of a company is 25%. State giving reason, which of the following transactions will a increase or b decrease or c not alter the
Gross Profit Ratio.
(i) Purchases of Stock-in-Trade 50,000.
(ii) Purchases Return 15,000.
(iii) Cash Sale of Stock-in-Trade 40,000.
(iv) Stock-in-Trade costing 20,000 withdrawn for personal use.
(v) Stock-in-Trade costing 15,000 distributed as free sample.

 

The solution of Question 110 Chapter 4 of +2-B: -

 

Transactions	Impact on Gross Profit Ratio	Reason
(i) Purchases of Stock-in-Trade 50,000.	No Change	The amount of Closing Stock is increase and no change in Revenue from Operations.
(ii) Purchases Return 15,000.	No Change	There will be decrease in both Purchase and Closing Inventory And no change in Revenue from Operations.
(iii) Cash Sale of Stock-in-Trade 40,000.	No Change	There will be increase in both Gross Profit and Revenue From Operations.
(iv) Stock-in-Trade costing 20,000 withdrawn for personal use.	No Change	The amounts of both Purchase and Closing Inventory is decreased and no any effect on the revenue from operations.
(v) Stock-in-Trade costing 15,000 distributed as free sample.	No Change	There will be decrease in both Purchase and Closing Inventory And no change in Revenue from Operations.

 

 

 

 

 

 

 

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Also, Check out the solved question of previous Chapters: -

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 - Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 - Accounting for Partnership Firms - Fundamentals
• Chapter No. 3 - Goodwill: Nature and Valuation
• Chapter No. 4 - Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 - Admission of a Partner
• Chapter No. 6 - Retirement/Death of a Partner
• Chapter No. 7 - Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 - Company Accounts -  Accounting for Share Capital
• Chapter No. 9 - Company Accounts - Issue of Debentures
• Chapter No. 10 - Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 - Financial Statements of a Company
• Chapter No. 2 - Financial Statement Analysis 
• Chapter No. 3 - Tools of Financial Statement Analysis - Comparative Statements and Common- Size Statements
• Chapter No. 4 - Accounting Ratios
• Chapter No. 5 - Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication