Question

Calculate G.P. Ratio from the following:

Credit Revenue from Operations were `1/4`th of Total Revenue from Operations. Credit Revenue from Operations were ₹ 1,20,000. Credit Purchases were `1/5`th of Cash Purchases. Credit Purchases were ₹ 40,000. Opening Inventory ₹ 70,000. It was ₹ 20,000 more than Closing Inventory; Carriage ₹ 15,000, Wages ₹ 45,000.

Answer 1

Let the Total Revenue from Operations be x.

Credit Revenue from Operations = `1/4`th of Total Revenue from Operations

₹ 1,20,000 = `1/4` x

x = ₹ 1,20,000 × 4

x (Total Revenue from Operations) = ₹ 4,80,000

Credit Purchases = `1/5`th of Cash Purchases

₹ 40,000 = `1/5` × Cash Purchases

Cash Purchases = ₹ 40,000 × 5

= ₹ 2,00,000

Purchases = Cash Purchases + Credit Purchases

= ₹ 2,00,000 + ₹ 40,000

= ₹ 2,40,000

Opening Inventory = ₹ 70,000

Opening Inventory was ₹ 20,000 more than Closing Inventory.

Closing Inventory = Opening Inventory − ₹ 20,000

= ₹ 70,000 − ₹ 20,000

= ₹ 50,000

Cost of Revenue from Operations = Opening Inventory + Purchase + Carriage + Wages − Closing Inventory

= ₹ 70,000 + ₹ 2,40,000 + ₹ 15,000 + ₹ 45,000 − ₹ 50,000

= ₹ 3,20,000

Gross Profit = Total Revenue from Operations − Cost of Revenue from Operations

= ₹ 4,80,000 − ₹ 3,20,000

= ₹ 1,60,000

Gross Profit Ratio = `"Gross Profit"/"Revenue from Operations" xx 100`

= `(₹ 1,60,000)/(₹ 4,80,000) xx 100`

= 33.33%