Page 278 - MA-12

4.6 Management Accounting (Section B)—ISC XII

Solved Questions

Illustration 1.
Following is the Statement of Profit and Loss of Grand Canyon Ltd. for the year ended
31st March, 2019:
STATEMENT OF PROFIT AND LOSS for the year ended 31st March, 2019
Particulars Note No. `
I. Income
Revenue from Operations 5,00,000
Other Income 1 5,000
Total 5,05,000
II. Expenses
Purchases of Stock-in-Trade 3,00,000
Changes in Inventories of Stock-in-Trade 2 (20,000)
Employees Benefit Expenses 3 14,000
Finance Cost 3,000
Other Expenses 4 1,28,000
Total 4,25,000

III. Net Profit (I – II) 80,000
Notes to Accounts
1. Other Income `
Dividend 5,000
2. Changes in Inventories of Stock-in-Trade
Opening Stock-in-Trade 70,000
Less: Closing Stock-in-Trade 90,000
(20,000)
3. Employees Benefit Expenses
Wages 14,000
4. Other Expenses
Carriage Inwards 6,000
Administrative Expenses 1,02,000
Selling and Distribution Expenses 20,000
1,28,000
You are required to calculate: (i) Gross Profit Ratio; (ii) Operating Ratio and (iii) Operating
Profit Ratio.

Solution:
Gross Profit
(i) Gross Profit Ratio = ×100
Revenue from Operations

` 2,00,000
= × 100 = 40%.
` 5,00,000