Question 113 Chapter 4 of +2-B - T.S. Grewal 12 Class

Question 113 Chapter 4 of +2-B

Operating Ratio

113. (i) Cost of Revenue from Operations Cost of Goods Sold Rs. 2,20,000;
Revenue from Operations Net Sales Rs. 3,20,000; Selling Expenses Rs.
12,000; Office Expenses 8,000; Depreciation 6,000. Calculate
Operating Ratio.
(ii) Revenue from Operations, Cash Sales 4,00,000; Credit Sales 1,00,000;
Gross Profit 1,00,000; Office and Selling Expenses 50,000. Calculate
Operating Ratio.

 

The solution of Question 113 Chapter 4 of +2-B: -

Case I :

Net Sales	=	Rs. 3,20,000
Operating Expenses	=	Selling Expenses + Office Expenses + Depreciation
	=	Rs. 12,000 + Rs. 8,000 + Rs. 6,000
	=	Rs. 26,000
Cost of Goods Sold	=	Rs. 2,20,000
Operating Cost	=	Cost of Goods Sold + Operating Expenses
	=	Rs. 2,20,000 + Rs. 26,000
	=	Rs. 2,46,000

 

Operating Ratio	=	Operating Cost	X	100
		Net Sales

=	2,46,000	X	100
	Rs. 3,20,000
=	76.87%

Case II:

Net Sales	=	Cash Sales + Credit Sales
	=	Rs. 4,00,000 + Rs. 1,00,000
	=	Rs. 5,00,000
Cost of Goods Sold	=	Net Sales – Gross Profit
	=	Rs. 5,00,000 + Rs. 1,00,000
	=	Rs. 4,00,000
Operating Expenses	=	Rs. 50,000
Operating Cost	=	Cost of Goods Sold + Operating Expenses
	=	Rs. 4,00,000 + Rs. 50,000
	=	Rs. 4,50,000

 

Operating Ratio	=	Operating Cost	X	100
		Net Sales

=	Rs. 4,50,000	X	100
	Rs. 5,00,000
=	90%

 

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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