Question 65 Chapter 14 of Class 12 Part – 2 – 2024

Question 65 Chapter 14 of Class 12 Part – 2 – 2024

Profitability Ratio

65. (G.P. Ratio) Calculate Gross Profit ratio in the following cases ;
(a) Opening inventory ₹ 50,000 ; Closing inventory ₹ 70,000 ; Inventory Turn over 6 times ; Gross Profit is 20% on Cost.
(b) Opening inventory is ₹ 5,000 in excess of closing inventory. Cash Sales is double of credit sales which is ₹ 70,000 ; Purchases ₹ 1,50,000.
(c) Cost of goods sold (Cost of goods i.e. Cost of Revenue from Operation) is ₹ 1,50,000 ; Sales (Revenue from Operation) are 20% above cost.

The solution of Question 65 Chapter 14 of Class 12 Part – 2 – 2024: -

(a) Inventory Turnover Ratio	=	Cost of Goods Sold
		Average Inventory
Average Inventory	=	Opening inventory +Closing inventory
		2
	=	₹ 50,000 + ₹ 70,000
		2
	=	₹ 60,000
6	=	Cost of Goods Sold
		₹ 60,000
Cost of Goods Sold	=	₹ 60,000 x 6
	=	₹ 3,60,000
Gross Profit is 20% on Cost
Gross Profit	=	20% of Cost of goods sold

	=	20	X	₹ 3,60,000
		100
	=	₹ 72,000
Sales	=	Cost of goods sold + Gross Profit
	=	₹ 3,60,000 + ₹ 72,000
	=	₹ 4,32,000
Gross Profit Ratio	=	Gross Profit	X	100
		Sales
	=	₹ 72,000	X	100
		₹ 4,32,000
	=	16.67%

(b) Credit Sales	=	₹ 8,40,000	X	100
		₹ 10,00,000
	=	84%

(b) Credit Sales	=	₹ 70,000
	=	₹ 70,000 x 2
	=	₹ 1,40,000
Total Sales	=	₹ 1,40,000 + ₹ 70,000
	=	₹ 2,10,000
Purchase	=	₹ 1,50,000
Opening Inventory	=	Closing Inventory + ₹ 5,000
Gross Profit	=	Sales – Purchases - Opening Inventory + Closing Inventory
	=	₹ 2,10,000 - ₹ 1,40,000 - ₹ 5,000
	=	₹ 55,000

Gross Profit Ratio	=	₹ 55,000	X	100
		₹ 2,10,000
	=	26.19%

(c) Cost of goods sold	=	₹ 1,50,000
Sales 20% above cost	=	₹ 1,50,000 + 20%

	=	20	X	₹ 1,50,000
		100
	=	₹ 30,000
Sales	=	₹ 1,50,000 + ₹ 30,000
	=	₹ 1,80,000
Gross Profit	=	₹ 1,80,000 + ₹ 1,50,000
	=	₹ 30,000

Gross Profit Ratio	=	₹ 30,000	X	100
		₹ 1,80,000
	=	16.67%