Loading Tutorstips...
✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Calculate Gross Profit Ratio from the following data: Cash Sales are 20% of Total Sales; Credit Sales are ₹5,00,000; Purchases are ₹4,00,000; Excess of Closing Inventory over Opening Inventory ₹25,000.
Let Total Sales = x. Cash Sales = 20% of x.
Total Sales = Cash Sales + Credit Sales
x = 0.20x + 5,00,000
0.80x = 5,00,000
x = ₹6,25,000 (Total Sales)
Cost of Goods Sold = Purchases − Excess of Closing Inventory over Opening Inventory
= 4,00,000 − 25,000 = ₹3,75,000
Gross Profit = Total Sales − Cost of Goods Sold = 6,25,000 − 3,75,000 = ₹2,50,000
Gross Profit Ratio = Gross Profit ÷ Net Sales × 100 = 2,50,000 ÷ 6,25,000 × 100 = 40%
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.
This guide covers "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.137 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
You can take our custom-built interactive practice quiz directly on this page to test your understanding of "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.137 - Accounting Ratios" instantly.