Question

101. Cash Revenue from Operations 4,00,000; Credit Revenue from Operations
21,00,000: Revenue from Operations Return 1,00,000; Cost of revenue
from operations 19,20,000. G.P. ratio will be
(A) 4%
(B) 23.2%
(C) 80%
(D) 20%​

Answer 1

Explanation:

Solution :

• Cash Revenue from Operations = 4,00,000
• Credit Revenue from Operations = 21,00,000
• Revenue from Operations Return = 1,00,000
• Cost of revenue from operations = 19,20,000

★ Gross Profit Ratio = (Gross Profit/Revenue from Operations) × 100

Revenue from Operations = (Cash Revenue from Operations + Credit Revenue from Operations) - Revenue from Operations Return

= (4,00,000 + 21,00,000) - 1,00,000

= 25,00,000 - 1,00,000

= 24,00,000

Revenue from Operations = 24,00,000

Gross Profit = Revenue from operations - Cost of revenue from operation

Gross Profit = 24,00,000 - 19,20,000

Gross Profit = 4,80,000

★ Gross Profit Ratio = (Gross Profit/Revenue from Operations) × 100

= (4,80,000/24,00,000)/100

= 20%

Gross Profit = 20%

Therefore, Option (D) 20%

Gross Profit = 20%.