Question

Cost of goods sold is Rs. 1,00,000, rate of gross profit on sales is 20%. What is the amount of sales?

• A. Rs. 1,20,000
• B. Rs. 80,000
• C. Rs. 1,25,000
• D. None of these

Answer 1

Answer: (C)

Rs. 1,25,000

Gross Profit is represented as
Sales-Cost of Goods sold=Gross Profit

Assuming sales is Rs.100, than gross profit is Rs.20

Cost of goods sold represent 80% of the sales.

In the given situation:

Cost of goods sold is Rs 100000 which is 80% of sales

Sales= Rs 100000/80*100

Sales Rs 125000