2017 · Q66
Consider the following information Rate of gross profit-25% on cost of goods sold Sales—Rs. 20,00,000 Which one of the following is the amount of grass profit?
General Accounting Principles, Auditing and InsuranceFinal accounts
- ARs. 5,00,000
- BRs. 6,25,000
- CRs. 3,75,000
- DRs. 4,00,000
Explanation
Gross profit of 25% on cost means profit is 25/125 of sales: Rs. 20,00,000 x 25/125 = Rs. 4,00,000. (Rs. 5,00,000 wrongly applies 25% to sales; Rs. 6,25,000 and Rs. 3,75,000 follow from misreading the base.) Hence D.