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Question 108 Chapter 4 of +2-B
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Table of Contents
Gross Profit Ratio
108. Calculate Gross Profit Ratio from the following data:
Average Inventory Rs. 3,20,000; Inventory Turnover Ratio 8 Times;
Average Trade Receivables Rs. 4,00,000; Trade Receivables Turnover
Ratio 6 Times; Cash Sales 25% of Net Sales.
The solution of Question 108 Chapter 4 of +2-B: –
| Inventory Turnover Ratio | = | 8 Times |
| Average Inventory | = | Rs 3,20,000 |
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| Inventory Turnover Ratio | = | Cost of Goods Sold |
| Average Inventory |
| 8 | = | Cost of Goods Sold |
| Rs. 3,20,000 | ||
| = | 3,20,000 x 8 | |
| Cost of Goods Sold | = | Rs. 25,60,000 |
| Trade Receivables Turnover Ratio | = | 6 Times |
| Average Trade Receivables | = | Rs. 4,00,000 |
| Trade Receivables Turnover Ratio | = | Net Credit Sales |
| Average Trade Receivable |
| 6 | = | Net Credit Sales |
| Rs. 4,00,000 | ||
| Net Credit Sales | = | Rs. 4,00,000 x 6 |
| = | Rs. 24,00,000 | |
| Total Sales | = | Cash Sales + Credit Sales |
| Total Sales | = | 25% of Total Sales + Credit Sales |
| 75% of Total Sales | = | Rs 24,00,000 |
| Total Sales | = | Rs. 24,00,000 |
| 75% | ||
| = | Rs 32,00,000 | |
| Gross Profit | = | Total Sales – Cost of Goods Sold |
| = | Rs. 32,00,000 – Rs. 25,60,000 | |
| = | Rs. 6,40,000 |
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| Revenue from Operations | = | Gross Profit | X | 100 |
| Net Sales |
| Revenue from Operations | = | Rs. 6,40,000 | X | 100 |
| Rs.32,00,000 | ||||
| = | 20% |
Balance Sheet: Meaning, Format & Examples
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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
