Question

From the following information, prepare a Trading and profit and loss account . Gross profit ratio =25% Net profit ratio= 20% Stock turnover ratio = 10 Net Profit /Capital = 1/5 Fixed asset/Capital= 5/4 Fixed assets = 6,00,000 Closing stock = 48,000​

Answer 1

Answer:

Trading and Profit and Loss Account for the year ended ________

Rs.  

Rs.

To Opening Stock 20,000 By Sales 8,00,000

To Purchases(Balancing figure) 6,80,000  

To Gross Profit c/d 2,00,000 By Closing stock 1,00,000

9,00,000  

9,00,000

To Expenses 40,000 By Gross Profit b/d 2,00,000

1,60,000  

2,00,000  

2,00,000

Balance Sheet of Sri Ganesh as at _______

Liabilities Rs. Assets Rs.

Capital  

Fixed assets 10,00,000

Opening Balance 6,40,000  

Add: Net Profit 1,60,000 Closing stock 1,00,000

8,00,000  

Current Liabilities 16,00,000 Other Current assets 13,00,000

24,00,000  

24,00,000

1. Fixed Asset is Rs. 10,00,000

Fixed Assets/Capital=5/4

Therefore, Capital-Rs. 10,00,000×4/5=Rs. 8,00,000.

2. Capital is  

2

1

​

 of Total Liabilities

Therefore Liabilities=Rs. 8,00,000×2=Rs. 16,00,000

3. Net Profit is 1/5 of Capital

Therefore Net Profit=Rs. 8,00,000×1/5=Rs. 1,60,000

4. Net Profit is 20% of Sales

Therefore Sales=Rs. 1,60,000×100/20=Rs. 8,00,000

5. Gross Profit Ratio=25% of Sales

Therefore, Gross Profit=Rs. 8,00,000×25%=Rs. 2,00,000

6. Stock Turnover Ratio(i.e., Cost of sales/Average Inventory) is 10

Cost of Sales=Sales−Gross Profit

=Rs. 8,00,000−Rs. 2,00,000

=Rs. 6,00,000

Therefore Average Inventory=Rs. 6,00,000/10=Rs. 60,000

7. Closing Stock is Rs. 1,00,000

Average Inventory=Rs. 60,000

Therefore, Opening Stock=(Rs. 60,000×2)-Rs. 1,00,000=Rs. 20,000

8. Fixed Assets is Rs. 10,00,000

Fixed Assets/Total Current Assets=5/7

Therefore, Total Current Assets is 10,00,000×7/5=Rs. 14,00,000

Closing Stock=Rs. 1,00,000

Therefore other Current Assets=Rs. 13,00,000

Explanation:

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