calculate gross profit ratio from the following : credit revenue from operation were 1/4th of total revenue from operations - Accountancy - Accounting Ratios

Question

calculate gross profit ratio from the following :
credit revenue from operation were 1/4th of total revenue from
operations
credit revenue from operations were rs 1,20,000
credit purchases were 1/5th of cash purchases
credit purchases were rs 40,000
opening inventory rs 70,000
it was rs 20,000 more than closing inventory
carriage rs 15,000
wages rs 45,000

Manisha Arora · Accepted Answer

Dear Student, the solution to your query is as follows

Calculation of Gross Profit Ratio

Gross Profit Ratio = Gross ProfitNet Sales×100                                  = 1,60,0004,80,000×100 = 33
33%

Working Note

Total Revenue from Operation (Total Sales) =Credit Revenue from Operation×41                                                                                =1,20,000×41= Rs 4,80,000
Let Cash Purchases = xCredit Purchases = x5= Rs 40,000Cash Purchases (x)=Rs 2,00,000Thus, Total Purchases = Cash Purchases + Credit Purchases                                           = 2,00,000 + 40,000 = Rs 2,40,000

Trading Account

Dr

Cr

Particulars
Amount
(Rs)
Particulars
Amount
(Rs)

Opening Stock
70,000
Sales
4,80,000

Purchases
2,40,000
Closing Stock
50,000

Carriage
15,000

Wages
45,000

Gross Profit (Balancing
Figure)
1,60,000

5,30,000

Trading Account
Dr.				Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Opening Stock	70,000	Sales	4,80,000
Purchases	2,40,000	Closing Stock	50,000
Carriage	15,000
Wages	45,000
Gross Profit (Balancing Figure)	1,60,000
	5,30,000		5,30,000