Explanation:

Gross Profit Ratio = Gross Profit/Sales

0.25= 4,00,000/sales

Sales= 16,00,000/-

Purchases= COGS + Closing Stock – Opening Stock

COGS= 16,00,000 x 75/100 = 12,00,000/-

Purchases= 12,00,000 + 10,000 (Closing stock is more than opening Stock by 10,000) = 12,10,000/-

Creditors Velocity= Total Creditors and B.P./Credit Purchases x 12

2= Total Creditors and B.P./Credit Purchases x 12

2 x credit purchases = Total Creditors and B.P. x 12

Total Creditors and B.P.= 2 x 12,10,000/12= Rs. 2,01,667

Creditors= 2,01,667- 10,000= 1,91,667

Debtors Velocity= Total Debtors and B.R./Credit Sales x 12

3= Total Debtors and B.R./Credit Sales x 12

3 x 16,00,000 = Total Debtors and B.R. x 12

Total Debtors and B.R.= 3 x 16,00,000/12= Rs. 4,00,000/-

Debtors= 4,00,000 – 25,000/-= 3,75,000/-