Question 113 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 113 Chapter 4 of +2-B

Question 113 Chapter 4 of +2-B

Operating Ratio

113. (i) Cost of Revenue from Operations Cost of Goods Sold Rs. 2,20,000;
Revenue from Operations Net Sales Rs. 3,20,000; Selling Expenses Rs.
12,000; Office Expenses 8,000; Depreciation 6,000. Calculate
Operating Ratio.
(ii) Revenue from Operations, Cash Sales 4,00,000; Credit Sales 1,00,000;
Gross Profit 1,00,000; Office and Selling Expenses 50,000. Calculate
Operating Ratio.

 

The solution of Question 113 Chapter 4 of +2-B: –

Case I :

Net Sales = Rs. 3,20,000
Operating Expenses = Selling Expenses + Office Expenses + Depreciation
  = Rs. 12,000 + Rs. 8,000 + Rs. 6,000
  = Rs. 26,000
Cost of Goods Sold = Rs. 2,20,000
Operating Cost = Cost of Goods Sold + Operating Expenses
  = Rs. 2,20,000 + Rs. 26,000
  = Rs. 2,46,000

 

Operating Ratio = Operating Cost X 100
Net Sales
  = 2,46,000 X 100
Rs. 3,20,000
  = 76.87%
   

Case II:

Net Sales = Cash Sales + Credit Sales
  = Rs. 4,00,000 + Rs. 1,00,000
  = Rs. 5,00,000
Cost of Goods Sold = Net Sales – Gross Profit
  = Rs. 5,00,000 + Rs. 1,00,000
  = Rs. 4,00,000
Operating Expenses = Rs. 50,000
Operating Cost = Cost of Goods Sold + Operating Expenses
  = Rs. 4,00,000 + Rs. 50,000
  = Rs. 4,50,000

 

Operating Ratio = Operating Cost X 100
Net Sales
  = Rs. 4,50,000 X 100
Rs. 5,00,000
  = 90%
   

 

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)

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T.S. Grewal’s Analysis of Financial Statements

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