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Question
Calculate G.P. Ratio from the following:
| ₹ | |
| Credit Revenue from Operations | 6,00,000 |
| Cash Revenue from Operations (Being 25% of Total Revenue from Operations) | |
| Purchases | 6,90,000 |
| Excess of Closing Inventory over Opening Inventory | 50,000 |
Numerical
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Solution
Let the Revenue from Operations be x.
Revenue from Operations = Cash Revenue from Operations + Credit Revenue from Operations
`x = 25/100 x + 6,00,000`
`x - 25/100 x` = ₹ 6,00,000
`75/100 x` = ₹ 6,00,000
`x = (₹ 6,00,000 xx 100)/75`
Revenue from Operations `(x)` = ₹ 8,00,000
Cost of Revenue from Operations = Purchases − Excess of Closing Inventory over Opening Inventory
= ₹ 6,90,000 − ₹ 50,000
= ₹ 6,40,000
Gross profit = Revenue from Operations − Cost of Revenue from Operations
= ₹ 8,00,000 − ₹ 6,40,000
= ₹ 1,60,000
Gross Profit Ratio = `"Gross Profit"/"Revenue from Operations" xx 100`
= `(₹ 1,60,000)/(₹ 8,00,000) xx 100`
= 20%
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