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Question
Calculate Gross Profit Ratio from the following data:
| ₹ | |
| Credit Revenue from Operations | 2,00,000 |
| Cash Revenue from Operations (being `33 1/3%` of Total Revenue from Operations) | |
| Purchases | 2,25,000 |
| Carriage Inwards | 25,000 |
| Excess of Closing Inventory over Opening Inventory | 10,000 |
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 = 33 1/3%` + ₹ 2,00,000
`x - 1/3 x` = ₹ 2,00,000
`2/3 x` = ₹ 2,00,000
`x = (₹ 2,00,000 xx 3)/2`
Revenue from Operations `(x)` = ₹ 3,00,000
Cost of Revenue from Operations = Purchases + Carriage Inwards − Excess of Closing Inventory over Opening Inventory
= ₹ 2,25,000 + ₹ 25,000 − ₹ 10,000
= ₹ 2,40,000
Gross Profit = Revenue from Operations − Cost of Revenue from Operations
= ₹ 3,00,000 − ₹ 2,40,000
= ₹ 60,000
Gross Profit Ratio = `"Gross Profit"/"Revenue from Operations" xx 100`
= `(₹ 60,000)/(₹ 3,00,000) xx 100`
= 20%
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