Question

9. From the following information calculate Gross Profit Ratio: 2
Cost of goods sold Rs. 900000, Sales Rs. 1200000.
Which items are included in Current Assets ? (any four)
Or​

Answer 1

SOLUTION :

❒ Given :-

• Cost of Goods Sold = Rs. 900000

• Sales = Rs. 1200000

❒ To Find :-

• Gross Profit = ?

❒ Required Formula :-

• ★ Gross Profit = Net Sales — Cost of Goods Sold

❒ Calculation :-

[ As sales return is not mentioned in the question, therefore, sales is considered as Net Sales. ]

Using the formula of Gross Profit,

• ★ Gross Profit = Net Sales — Cost of Goods Sold

➜ Gross Profit = Rs. 1200000 — Rs. 900000

∴ Gross Profit = Rs. 300000 ✪

• Hence, the Gross Profit is Rs. 300000.

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ANSWER :

❍ Current Assets :-

• ✎ Current assets include those assets which are meant for sale or which can be converted into cash within a short period of one year. Current assets are those assets which are made or acquired and help for a certain period of time with a view to reselling them at a profit in the ordinary course of business.

❍ Example of some Current assets are :-

• ✎ Debtors

• ✎Cash in Hand

• ✎ Cash at Bank

• ✎ Bill Receivable

• ✎ Prepaid Expenses

• ✎ Closing Stock

• ✎ Accrued Income

• ✎ Short-term Investment