# 12th | Volume 3 | Chapter:4 | Question No. 111 to 115 | Accounting Ratio | Ts grewal Accounts Solution 2022-2023

#### Compute Gross Profit Ratio from the following information: Revenue from Operations, i.e., Net Sales =  `4,00,000; Gross Profit 25% on Cost.

Gross Profit 25% on Cost.

Let Cost = x

Gross Profit = x × 25/00=25x/100

Sales = Cost + Gross Profit

4,00,000 =x+ 25x/100

Or, 4,00,000 = 125x/100

Or, x= 4,00,000×100/125 = 3,20,000

Cost = x =  ` 3,20,000

Gross profit = Sales – Cost

Gross profit ratio= Gross profit / Net Sales ×100

= 80,000×100/4,00,000=20%

#### Question 112:

Calculate Gross Profit Ratio from the following data:
Cash Sales are 20% of Total Sales; Credit Sales are
`5,00,000; Purchases are  `4,00,000; Excess of Closing Inventory over Opening Inventory  `25,000.

Credit Sales = 5,00,000
Cash sales = 20% of Total Sales

Let Total Sales be ‘x’
Therefore, Cash Sales = 20% of x
Total Sales = Cash Sales + Credit Sales

x=20/100x+5,00,000

x-20/100x=5,00,000

80/100x=5,00,000

Cost of Goods Sold = Purchases – Excess of Closing Stock over Opening Stock
=
` 4,00,000 –  ` 25,000 =  ` 3,75,000
Gross Profit = Total Sales – Cost of Goods Sold
=
` 6,25,000 – 3,75,000 =  ` 2,50,000

Gross profit ratio= Gross profit / Net Sales ×100

= 2,50,000×100/6,25,000=40%

#### Question 113:

From the following information, calculate Gross Profit Ratio:

 ` ` Credit Sales 10,00,000 Decrease in Inventory 20,000 Purchases 6,00,000 Returns Outward 20,000 Carriage Inwards 20,000 Wages 1,00,000 Rate of Credit Sale to Cash Sale 4:1

Credit Sale =  ` 10,00,000
Rate of Credit Sale to Cash Sale = 4:1
Cash Sale = 1/4 × 10,00,000=
` 2,50,000

Total Sales = Cash Sales + Credit Sales =
` 2,50,000 +  ` 10,00,000 =  ` 12,50,000
Cost of Goods Sold = Purchases – Return Outward + Carriage Inwards + Wages + Decrease in Inventory
=
` 6,00,000 –  ` 20,000 +  ` 20,000 +  ` 1,00,000 +  ` 20,000
=
` 7,20,000
Gross Profit = Total Sales – Cost of Goods Sold
=
` 12,50,000 –  ` 7,20,000 =  ` 5,30,000

Gross Profit Ratio = Gross Profit / Net Sales × 100 = 5,30,000/12,50,000 × 100 = 42.40%

#### Question 114:

From the following information, calculate Gross Profit Ratio:

 ` ` Revenue from Operations: Cash 2,00,000 Carriage Inwards 8,000 Credit 8,00,000 Salaries 42,000 Purchases: Decrease in Inventory 1,22,000 Cash 40,000 Returns Outwards 20,000 Credit 3,60,000 Wages 20,000

(CBSE 2020 C)

Total Sales= 2,00,000+8,00,000=10,00,000

Gross Profit= Total Sales + Wages- Purchases- Carriage Inwards- Returns Outwards- Decrease in Inventory

Gross Profit= 10,00,000+20,000-4,00,000-8,000-20,000-1,22,000

Gross Profit=4,70,000

Gross Profit Ratio=Gross Profit ×100/ Revenue from Operations

Gross Profit Ratio=4,70,000 ×100/ 10,00,000

Gross Profit Ratio = 47%

#### Opening Inventory `2,00,000, Closing Inventory `1,20,000, Inventory turnover Ratio is 8 times; Selling price 25% above cost. Calculate Gross Profit Ratio

Gross profit ratio = gross profit by revenue from operation ×100

Gross profit ratio = 32,0000/ 16,00,000 × 100= 20%

Average inventory = opening inventory + closing inventory by 2

Average inventory = 2,00,000 + 12,0000/2

Average inventory = 1,60,000

Cost of revenue from operation = average inventory × inventory turnover ratio

Cost of revenue from operation =1,60,000 × 8 = 12,80,000

Gross profit = 25% of 12,80,000 = 3,20,000

Revenue from operations = cost of revenue from operations + gross profit

Revenue from operations = 12,80,000 + 3,20,000 = 16,00,000