Profit or loss pre-and post incorporation

Accountancy

Book back question, question no.3. About gross profit ratio. Since months after incorporation is 8 months , Why did they multiply the 30% with 10 X instead of 8Xï¿¼ï¿¼ ï¿¼

Susai Yappan

CA Inter

★ 12K+

16-Aug-21 17:11

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Answers (2)

Best Answer

Gross profit% is applied on sales post incorporation. Post incorporation sales = 1.25x * 8 months = 10x GP = 30% of 10x = 3x

Himanshu Somani

CA Final

★ 97K+

16-Aug-21 19:22

Himanshu Somani

Gross profit% is applied on sales post incorporation. Post incorporation sales = 1.25x * 8 months = 10x GP = 30% of 10x = 3x

Thank you soo much brother

Thread Starter

Susai Yappan

CA Inter

★ 12K+

16-Aug-21 21:40