Question 65 Chapter 4 of +2-B
Table of Contents
Profitability Ratio
65. (G.P. Ratio) Calculate Gross Profit ratio in the following cases ;
(a) Opening inventory ₹ 50,000 ; Closing inventory ₹ 70,000 ; Inventory Turn over 6 times ; Gross Profit is 20% on Cost.
(b) Opening inventory is ₹ 5,000 in excess of closing inventory. Cash Sales is double of credit sales which is ₹ 70,000 ; Purchases ₹ 1,50,000.
(c) Cost of goods sold (Cost of goods i.e. Cost of Revenue from Operation) is ₹ 1,50,000 ; Sales (Revenue from Operation) are 20% above cost.
The solution of Question 65 Chapter 4 of +2-B: –
| (a) Inventory Turnover Ratio | = | Cost of Goods Sold |
| Average Inventory | ||
| Average Inventory | = | Opening inventory +Closing inventory |
| 2 | ||
| = | ₹ 50,000 + ₹ 70,000 | |
| 2 | ||
| = | ₹ 60,000 | |
| 6 | = | Cost of Goods Sold |
| ₹ 60,000 | ||
| Cost of Goods Sold | = | ₹ 60,000 x 6 |
| = | ₹ 3,60,000 | |
| Gross Profit is 20% on Cost | ||
| Gross Profit | = | 20% of Cost of goods sold |
| = | 20 | X | ₹ 3,60,000 | |
| 100 | ||||
| = | ₹ 72,000 | |||
| Sales | = | Cost of goods sold + Gross Profit | ||
| = | ₹ 3,60,000 + ₹ 72,000 | |||
| = | ₹ 4,32,000 | |||
| Gross Profit Ratio | = | Gross Profit | X | 100 |
| Sales | ||||
| = | ₹ 72,000 | X | 100 | |
| ₹ 4,32,000 | ||||
| = | 16.67% |
| (b) Credit Sales | = | ₹ 8,40,000 | X | 100 |
| ₹ 10,00,000 | ||||
| = | 84% |
| (b) Credit Sales | = | ₹ 70,000 |
| = | ₹ 70,000 x 2 | |
| = | ₹ 1,40,000 | |
| Total Sales | = | ₹ 1,40,000 + ₹ 70,000 |
| = | ₹ 2,10,000 | |
| Purchase | = | ₹ 1,50,000 |
| Opening Inventory | = | Closing Inventory + ₹ 5,000 |
| Gross Profit | = | Sales – Purchases – Opening Inventory + Closing Inventory |
| = | ₹ 2,10,000 – ₹ 1,40,000 – ₹ 5,000 | |
| = | ₹ 55,000 |
| Gross Profit Ratio | = | ₹ 55,000 | X | 100 |
| ₹ 2,10,000 | ||||
| = | 26.19% |
| (c) Cost of goods sold | = | ₹ 1,50,000 |
| Sales 20% above cost | = | ₹ 1,50,000 + 20% |
| = | 20 | X | ₹ 1,50,000 | |
| 100 | ||||
| = | ₹ 30,000 | |||
| Sales | = | ₹ 1,50,000 + ₹ 30,000 | ||
| = | ₹ 1,80,000 | |||
| Gross Profit | = | ₹ 1,80,000 + ₹ 1,50,000 | ||
| = | ₹ 30,000 |
| Gross Profit Ratio | = | ₹ 30,000 | X | 100 |
| ₹ 1,80,000 | ||||
| = | 16.67% |
Also, Check out the solved question of previous Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
