Accountancy

Calculate Gross Profit Ratio from the following data: Cash Sales are 20% of Total Sales; Credit Sales are Rs. 5,00,000; Purchases are Rs. 4,00,000; Excess of Closing Inventory over Opening Inventory Rs. 25,000.

SOLUTION Cash sales = 20% of Total Sales Let Total Sales be ‘x’Therefore, Cash Sales = 20% of xTotal Sales = Cash Sales + Credit Salesx   = 20 / 100x +…

Continue ReadingCalculate Gross Profit Ratio from the following data: Cash Sales are 20% of Total Sales; Credit Sales are Rs. 5,00,000; Purchases are Rs. 4,00,000; Excess of Closing Inventory over Opening Inventory Rs. 25,000.

Compute Gross Profit Ratio from the following information: Revenue from Operations, i.e., Net Sales : Rs. 4,00,000; Gross Profit 25% on Cost.

SOLUTION Gross Profit 25% on Cost.Let Cost = xGross Profit = x × 25 / 100= 25x / 100  Sales = Cost + Gross Profit4,00,000 = x+ 25x / 100Or, 4,00,000 =…

Continue ReadingCompute Gross Profit Ratio from the following information: Revenue from Operations, i.e., Net Sales : Rs. 4,00,000; Gross Profit 25% on Cost.

From the following, calculate Gross Profit Ratio:Gross Profit: Rs. 50,000; Revenue from Operations Rs. 5,00,000; Sales Return: Rs. 50,000.

SOLUTION Net Sales =  5,00,000Gross Profit = 50,000Gross Profit Ratio = Gross Profit /  Net Sales × 100 = 50,000 / 5,00,000 × 100 = 10% Note: Here we will not deduct the amount of sales return because the amount of net sales has already been…

Continue ReadingFrom the following, calculate Gross Profit Ratio:Gross Profit: Rs. 50,000; Revenue from Operations Rs. 5,00,000; Sales Return: Rs. 50,000.

Compute Gross Profit Ratio from the following information: Cost of Revenue from Operations (Cost of Goods Sold) Rs. 5,40,000; Revenue from Operations (Net Sales) Rs. 6,00,000.

SOLUTION Gross Profit = Revenue from Operations – Cost of Revenue from Operations= 6,00,000 – 5,40,000= Rs. 60,000Gross Profit Ratio = Gross Profit / Revenue from Operations × 100 = 60,000 / 6,00,000 × 100 = 10%

Continue ReadingCompute Gross Profit Ratio from the following information: Cost of Revenue from Operations (Cost of Goods Sold) Rs. 5,40,000; Revenue from Operations (Net Sales) Rs. 6,00,000.

A company earns Gross Profit of 25% on cost. For the year ended 31st March, 2017 its Gross Profit was Rs. 5,00,000; Equity Share Capital of the company was Rs. 10,00,000; Reserves and Surplus Rs. 2,00,000; Long-term Loan Rs. 3,00,000 and Non-current Assets were Rs. 10,00,000. Compute the ‘Working Capital Turnover Ratio’ of the company.

SOLUTION Working Capital Turnover Ratio = Revenue from Operation / Working CapitalGross Profit = 25% on CostLet Cost of Goods sold be Rs. 100.Gross Profit = Rs. 25Revenue from Operations = (100 + 25) =  Rs. 125When…

Continue ReadingA company earns Gross Profit of 25% on cost. For the year ended 31st March, 2017 its Gross Profit was Rs. 5,00,000; Equity Share Capital of the company was Rs. 10,00,000; Reserves and Surplus Rs. 2,00,000; Long-term Loan Rs. 3,00,000 and Non-current Assets were Rs. 10,00,000. Compute the ‘Working Capital Turnover Ratio’ of the company.

Calculate Working Capital Turnover Ratio from the following information: Revenue from Operations Rs. 30,00,000; Current Assets Rs. 12,50,000; Total Assets Rs. 20,00,000; Non-current Liabilities Rs. 10,00,000, Shareholders’ Funds Rs. 5,00,000.

SOLUTION Working Capital Turnover Ratio = Revenue from Operations (Net Sales)/Working Capital= Rs. 30,00,000  (Given)Working Capital = Current Assets-Current Liabilities Current Assets= 12,50,000  (Given)Current Liabilities = ?Total Assets = Total Liabilities = Rs. 20,00,000 (Given)Total Liability = Shareholders' Funds + Non-Current Liabilities + Current Liabilities20,00,000 = 5,00,000 + 10,00,000 + Current LiabilitiesCurrent Liability = 20,00,000 – 15,00,000= Rs. 5,00,000Working Capital =…

Continue ReadingCalculate Working Capital Turnover Ratio from the following information: Revenue from Operations Rs. 30,00,000; Current Assets Rs. 12,50,000; Total Assets Rs. 20,00,000; Non-current Liabilities Rs. 10,00,000, Shareholders’ Funds Rs. 5,00,000.

Capital Employed Rs. 12,00,000; Net Fixed Assets Rs. 8,00,000; Cost of Goods Sold or Cost of Revenue from Operations Rs. 40,00,000; Gross Profit is 20% on Cost. Calculate Working Capital Turnover Ratio.

SOLUTION Cost of Goods Sold = 40,00,000Gross Profit = 20% of CostGross Profit = 20 / 100 × 40,00,000= 8,00,000 Total Sales Cost of goods sold + Gross profit = 40,00,000…

Continue ReadingCapital Employed Rs. 12,00,000; Net Fixed Assets Rs. 8,00,000; Cost of Goods Sold or Cost of Revenue from Operations Rs. 40,00,000; Gross Profit is 20% on Cost. Calculate Working Capital Turnover Ratio.

Gross Profit at 25% on cost; Gross profit Rs. 5,00,000; Equity Share Capital Rs. 10,00,000; Reserves and Surplus Rs. 2,00,000; Long-term Loan Rs. 3,00,000; Fixed Assets (Net) Rs. 10,00,000. Calculate Working  Capital Turnover Ratio

SOLUTION Gross Profit = 25% on CostLet Cost be = xGross Profit = x × 25 / 100 = 25x / 100Or, 5,00,000 = 25x / 100Or, x = 5,00,000 × 100 /…

Continue ReadingGross Profit at 25% on cost; Gross profit Rs. 5,00,000; Equity Share Capital Rs. 10,00,000; Reserves and Surplus Rs. 2,00,000; Long-term Loan Rs. 3,00,000; Fixed Assets (Net) Rs. 10,00,000. Calculate Working  Capital Turnover Ratio

Equity Share Capital Rs. 15,00,000; Gross Profit on Revenue from Operations, i.e., Net Sales 33.13%; Cost Revenue from Operations or Cost of Goods Sold Rs. 20,00,000; Current Assets Rs. 10,00,000; Current Liabilities Rs. 2,50,000. Calculate Working Capital Turnover Ratio. 

SOLUTION Net Sales = Cost of Goods sold + Gross ProfitNet Sales = 20,00,000 + 1/3 of Net SalesLet Net Sales = xx = 20,00,000 + x / 3Net sales (x) =…

Continue ReadingEquity Share Capital Rs. 15,00,000; Gross Profit on Revenue from Operations, i.e., Net Sales 33.13%; Cost Revenue from Operations or Cost of Goods Sold Rs. 20,00,000; Current Assets Rs. 10,00,000; Current Liabilities Rs. 2,50,000. Calculate Working Capital Turnover Ratio.