Athif trading company is a popular distributor in Salala, having operations in the entire Oman. Over these years, the company has gained a very good public opinion and quiet a big number of loyal customers. During the last year, the company has faced some financial struggles due to the pandemic – crisis. The company has decided to plan well for the current year based on the past performance so that the company will be able to regain its status.The management of the company has given with you the Income statement for the last year and asked you to calculate the gross profit and net profit marginChoose the Gross profit margin and net profit margin of the business from the following options? a.Gross profit margin is 24.36% and Net profit margin is 45.45%b.Gross profit margin is 40% and Net profit margin is 30.66%c.Gross profit margin is 30.66% and Net profit margin is 40%d.Gross profit margin is 45.45% and the Net profit margin is 24.36% ParticularOMRParticularOMR76,250 By Sales3,15,250 " Closing stock2,0005,000ToOpening Stock5,50,000Purchases98,500Carriage and FreightWagesGross Profit b/d2,50,0006,48,5002,50,0006,48,5001,01,000 By Gross Profit b/d12,0002,0007,000134,000 " Profit on sale of shares2,56,000ToAdministration expensesNon-operating incomes:"Selling and Dist. expenses" Non-operating expenses" Financial ExpensesNet Profit c/d1,500"Interest on Securities" Dividend on shares3,7507502,56,000

Gross Profit margin = gross profit/sales *100 Net profit margin = net profit/sales*100

Answered: Athif trading company is a popular…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Athif trading company is a popular distributor in Salala, having operations in the entire Oman. Over these years, the company has gained a very good public opinion and quiet a big number of loyal customers. During the last year, the company has faced some financial struggles due to the pandemic – crisis. The company has decided to plan well for the current year based on the past performance so that the company will be able to regain its status.

The management of the company has given with you the Income statement for the last year and asked you to calculate the gross profit and net profit margin

Choose the Gross profit margin and net profit margin of the business from the following options?

Gross profit margin is 24.36% and Net profit margin is 45.45%

Gross profit margin is 40% and Net profit margin is 30.66%

Gross profit margin is 30.66% and Net profit margin is 40%

Gross profit margin is 45.45% and the Net profit margin is 24.36%

Particular
OMR
Particular
OMR
76,250 By Sales
3,15,250 " Closing stock
2,000
5,000
To
Opening Stock
5,50,000
Purchases
98,500
Carriage and Freight
Wages
Gross Profit b/d
2,50,000
6,48,500
2,50,000
6,48,500
1,01,000 By Gross Profit b/d
12,000
2,000
7,000
134,000 " Profit on sale of shares
2,56,000
To
Administration expenses
Non-operating incomes:
"Selling and Dist. expenses
" Non-operating expenses
" Financial Expenses
Net Profit c/d
1,500
"Interest on Securities
" Dividend on shares
3,750
750
2,56,000

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