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Question 109 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 109 Chapter 4 of +2-B
Question No. 109- Chapter No.4 - T.S. Grewal +2 Book Part B

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Question 109 Chapter 4 of +2-B

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Gross Profit Ratio

109. (i) Revenue from Operations: Cash Sales 4,20,000; Credit Sales 6,00,000;
Return 20,000. Cost of Revenue from Operations or 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.

 

The solution of Question 109 Chapter 4 of +2-B: –

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Case I :

Net Sales=Cash Sales + Credit Sales – Sales Return
 =Rs. 4,20,000 + Rs. 6,00,000 – Rs. 20,000
 =Rs. 10,00,000
Cost of Goods Sold=Rs. 8,00,000
Gross Profit=Net Sales – Cost of Goods Sold
 =Rs. 10,00,000 – Rs. 8,00,000
 =Rs. 2,00,000

 

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
Revenue from Operations=Gross ProfitX100
Net Sales
Revenue from Operations=Rs. 2,00,000X100
Rs.10,00,000
 =20%
  

Case II :

Average Stock=Rs. 1,60,000
Inventory Turnover Ratio=6 Times
Inventory Turnover Ratio=Cost of Goods Sold
Average Inventory

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6=Cost of Goods Sold
Rs. 1,60,000
Cost of Goods Sold=Rs 1,60,000 X 6
 =Rs 9,60,000
Gross Profit=25% on Cost
Gross Profit=25XRs.9,60,000
100
 =Rs.2,40,000 

 

Net Sales=Cost of Goods Sold + Gross Profit
 =Rs. 9,60,000 + Rs. 2,40,000
 =Rs. 12,00,000

 

Gross Profit Ratio=Gross ProfitX100
Net Sales
Gross Profit Ratio=Rs. 2,40,000X100
Rs.12,00,000
 =20%  

 

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Case III :

Opening Inventory=Rs. 1,00,000
Closing Inventory=Rs. 60,0000
Average Inventory=Opening Inventory + Closing Inventory
2
 =Rs. 1,00,000 + Rs. 60,000
2
 =Rs. 80,000

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Inventory Turnover Ratio=Cost of Goods Sold
Average Inventory
8=Cost of Goods Sold
Rs. 80,000
Cost of Goods Sold=Rs. 80,000 x 8
 =Rs. 6,40,000
Gross Profit=25% on Cost
Gross Profit=25 x Rs. 6,40,000
100
 =Rs.1,60,000 
Net Sales=Cost of Goods Sold + Gross Profit
 =Rs. 6,40,000 + Rs. 1,60,000
 =Rs. 8,00,000
Gross Profit Ratio=Gross ProfitX100
Net Sales
Gross Profit Ratio=Rs. 1,60,000X100
Rs. 8,00,000
 =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)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

Question 1 Chapter 1 of +2-B
T.S. Grewal’s Analysis of Financial Statements

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