subject: accountancy
a company earns a gross profit of 25% on cost. its credit revenue from operations is twice its
cash revenue from operations. if credit sales is rs 800000, calculate gross profit ratio
Dear Student
Regards
| Particulars | Amt | |
| Credit Sales | 800,000 | |
| As Credit Sales are twice of Cash sales, therefore cash sales | Credit Sales / 2 | 400,000 |
| Total Sales | 1,200,000 | |
| G.P on Cost | 25% | |
| G.P on Sales | 25/125 x 100 | 20% |
| Gross profit | (12,00,000 x 20%) | 240,000 |
| Verify, Gross profit ratio | G.P / Net Sales x 100 | 20% |
Regards
