# Question 70 Chapter 4 of +2-B – USHA Publication 12 Class

Q-70- CH-4 Book 2 - Usha Pub. +2 Book 2020 - Solution

Question 70 Chapter 4 of +2-B

IV. Profitability Ratios

70. (GP Ratio/NP Ratio/Operating Ratio) Following is the income statement of Strong for the year ending 31st March. 2018. INCOME STATEMENT FOR THE YEAR ENDING 31ST MARCH, 2018

 Particulars Amount ₹ Revenue from Operations (Sales) 3,00,000 Add Other Income Interest 900 Dividend 2,250 Profit on Sale of Securities 450 3,600 Total Revenue 3,03,000 Less : Expenses Purchases 1,89,150 Change in Inventories -13,350 (Opening Inventory- Closing Inventory) (₹ 45,750 – ₹ 59,100) Carriage Inward 1,200 Wages 3,000 Administrative Expenses 60,600 Financial Expenses -Interest 720 -Discount 1,440 Bad Debts 2,040 Selling and Distribution Expenses 7,200 Non-Opening Expenses 1,200 2,53,200 Net Profit 50,400

You are required to calculate (a) Gross profit ratio (b) Net profit ratio (c) Operating ratio

## The solution of Question 70 Chapter 4 of +2-B: –

 (1) Gross Profit Ratio = ₹ 1,20,000 X ₹ 2,00,000 ₹ 3,00,000 = 40%
 (2) Net Profit Ratio = ₹ 50,400 X 8,00,000 ₹ 3,00,000 = 16.8%
 (c) Operating Ratio = Operating Cost* X 100 Net sales = ₹ 2,50,000 X 100 ₹ 3,00,000 = 84%
 Cost of goods sold = Opening Inventory – Closing Inventory + Purchase + Carriage Inwards + Wages = ₹ 45,750 – ₹ 59,100+ ₹ 1,89,150 + ₹ 1,200 + ₹ 3,000 = ₹ 1,80,000 Gross Profit = Sales – Cost of goods sold = ₹ 3,00,000 – ₹ 1,80,000 = ₹ 1,20,000 Operating Cost = Cost of goods sold + Operating Expenses = ₹ 1,80,000 + ₹ 72,000 = ₹ 2,52,000

Also, Check out the solved question of previous Chapters: –

## Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

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