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Question
Following information is available for the year ending 31st March, 2023, calculate gross profit ratio:
| ₹ | |
| Cash Revenue from Operations | 25,000 |
| Credit Revenue from Operations | 75,000 |
| Purchases: Cash | 15,000 |
| Credit | 60,000 |
| Carriage Inwards | 2,000 |
| Salaries | 25,000 |
| Decrease in Inventory | 10,000 |
| Return Outwards | 2,000 |
| Wages | 5,000 |
Numerical
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Solution
Revenue from Operations = Cash Revenue from Operations + Credit Revenue from Operations
= ₹ 25,000 + ₹ 75,000
= ₹ 1,00,000
Purchases = Cash + Credit − Return Outwards
= ₹ 15,000 + ₹ 60,000 − ₹ 2,000
= ₹ 73,000
Cost of Revenue from Operations = Purchases + Carriage Inwards + Wages + Decrease in Inventory
= ₹ 73,000 + ₹ 2,000 + ₹ 5,000 + ₹ 10,000
= ₹ 90,000
Gross Profit = Revenue from Operations − Cost of Revenue from Operations
= ₹ 1,00,000 − ₹ 90,000
= ₹ 10,000
Gross Profit Ratio = `"Gross Profit"/"Revenue from Operations" xx 100`
= `(₹ 10,000)/(₹ 1,00,000) xx 100`
= 10%
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