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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
(i) Revenue from Operations: Cash Sales ₹4,20,000; Credit Sales ₹6,00,000; Return ₹20,000. Cost of Revenue from Operations (Cost of Goods Sold) ₹8,00,000. Calculate Gross Profit Ratio.
(ii) Average Inventory ₹1,60,000; Inventory Turnover Ratio is 6 times; Selling Price 25% above cost. Calculate Gross Profit Ratio.
(iii) Opening Inventory ₹1,00,000; Closing Inventory ₹60,000; Inventory Turnover Ratio 8 times; Selling Price 25% above cost. Calculate Gross Profit Ratio.
(i)
Net Sales = Cash Sales + Credit Sales − Sales Return = 4,20,000 + 6,00,000 − 20,000 = ₹10,00,000
Gross Profit = Net Sales − Cost of Goods Sold = 10,00,000 − 8,00,000 = ₹2,00,000
Gross Profit Ratio = 2,00,000 ÷ 10,00,000 × 100 = 20%
(ii)
Cost of Goods Sold = Average Inventory × Inventory Turnover Ratio = 1,60,000 × 6 = ₹9,60,000
Gross Profit = 25% on Cost = 25/100 × 9,60,000 = ₹2,40,000
Net Sales = Cost of Goods Sold + Gross Profit = 9,60,000 + 2,40,000 = ₹12,00,000
Gross Profit Ratio = 2,40,000 ÷ 12,00,000 × 100 = 20%
(iii)
Average Inventory = (Opening Inventory + Closing Inventory) ÷ 2 = (1,00,000 + 60,000) ÷ 2 = ₹80,000
Cost of Goods Sold = Average Inventory × Inventory Turnover Ratio = 80,000 × 8 = ₹6,40,000
Gross Profit = 25% on Cost = 25/100 × 6,40,000 = ₹1,60,000
Net Sales = Cost of Goods Sold + Gross Profit = 6,40,000 + 1,60,000 = ₹8,00,000
Gross Profit Ratio = 1,60,000 ÷ 8,00,000 × 100 = 20%
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.143 - 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.
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