Question

40. Calculate Gross Profit Ratio from the following information Cash Sale was 1/4th of Total Sales: Cash Sales was 2,40,000; Cash Purchase was 20% of Credit Purchase. Cash Purchase was 80,000 Opening Inventory 60,000; Closing Inventory was 20,000 more than Opening Inventory. Carriage Inward 20,000. (Ans. Gross Profit Ratio : 50%​

Answer 1

Gross profit ratio =gross profitRevenue from operations×100=Rs160000Rs800000×100=20%

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Answer 2

Explanation:

Let,

Total Sales = x

• Total Sales = Cash Sales + Credit Sales

x = 1/4th of x + Credit Sales

x/4 = 2,40,000

2,40,000 × 4 = 9,60,000

Total Sales = 9,60,000

• Purchases = Cash Purchase + Credit Purchase

Purchases = 20% of Credit Purchase + Credit Purchase

Cash Purchase = 20% of Credit Purchase = 80,000

Let,

Credit Purchase = y

20% of y = 80,000

0.2y = 80,000

y = 80,000/0.2

y = 4,00,000

Credit Purchase = 4,00,000

• Purchases = Cash Purchase + Credit Purchase

Purchases = 80,000 + 4,00,000

Purchases = 4,80,000

• Cost of Goods Sold = Opening Inventory + Purchases + Carriage Inward - Closing Inventory

Cost of Goods Sold = 60,000 + 4,80,000 + 20,000 - 80,000

Cost of Goods Sold = 4,80,000

• Gross Profit = Net Sales - Cost Of Goods Sold

Gross Profit = 9,60,000 - 4,80,000

Gross Profit = 4,80,000

★ Gross Profit Ratio = (Gross Profit/Net Sales) × 100

Gross Profit Ratio = (4,80,000/9,60,000) × 100

Gross Profit Ratio = 50 %

Therefore, Gross Profit Ratio = 50 %.