Question 75 Chapter 4 of +2-B

Question 75 Chapter 4 of +2-B

IV. Profitability Ratios

75. (GP Ratio/Operating NP Ratio/NP Ratio) From the following income statement of Modi Chemicals, compute (a) Gross profit ratio (b) Operating net profit ratio and (c) Net profit ratio. Ignore taxation.

Statement of Profit And Loss
Particulars Amount ₹
Revenue from Operations (Sales) 8,43,500
Add Other Income   
Profit on Sale of Car20,000 
Interest on Investment40,00060,000
Total Revenue 9,03,500
Less : Expenses  
Purchases4,65,000 
Changes in Inventories (Opening Inventory — Closing Inventory) (₹ 30,500 – ₹ 55,000)-24,500 
Depreciation16,000 
Factory Expenses1,43,000 
Office Expenses50,000 
Selling Expenses30,000 
Distribution Expenses20,000 
Provision for Doubtful Debts4,000 
Interest on Debenture14,000 
Loss of Cash by Theft6,0007,23,500
Net Profit 1,80,000

 

The solution of Question 75 Chapter 4 of +2-B: – 

 

(a) Operating Profit Ratio=₹ 2,60,000X₹ 2,00,000
₹ 8,43,500
 =30.82%  
(b) Net Profit Ratio=₹ 1,40,000X₹ 9,00,000
 ₹ 8,43,500
 =16.60%  
     
(c) Operating Ratio=₹ 1,80,000X100
 ₹ 8,43,500
     
 =21.34%  
Cost of goods sold=Opening Stock + Purchases + Factory Expenses – Closing Stock
 =₹ 30,500 + ₹ 4,65,000 + ₹ 1,43,000 – ₹ 55,000
 =₹ 5,83,500
Operating Net profit=Net profit + Non operating expenses* – Non-operating incomes**
 =₹ 1,80,000 + 20,000 – ₹ 40,000
 =₹ 1,40,000
Gross Profit=Sales – Cost of goods sold
 =₹ 8,43,500 – ₹ 5,83,500
 =₹ 2,60,000

 

*Non operating expenses=Loss of Cash by Theft + Interest on Debentures
 =₹ 6,000 + ₹ 14,000
 =₹ 20,000
**Non operating incomes=Profit on sale of Car + Interest on Investment
 =₹ 20,000 + ₹ 40,000
 =₹ 60,000


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

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

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

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

2 Book 3 min 225x300 - Question 75 Chapter 4 of +2-B  - USHA Publication  12 Class
T.S. Grewal’s Analysis of Financial Statements

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