A business has the following balances in its financial records: Income tax £30,000; Selling & administration expenses £80,000; Revenue £350,000; Interest expenses £15,000; Cost of Sales £190,000. Which of the following is correct? $\text { Gross profit } \quad \text { Operating profit } \quad \text { Net profit after tax }$
A) $£ 160,000 \quad \quad\quad £ 80,000 \quad \quad \quad \quad \quad £ 35,000$
B) $£ 80,000 \quad \quad\quad £ 65,000 \quad \quad \quad \quad \quad £ 35,000$
C) $£ 160,000 \quad \quad £ 65,000 \quad \quad \quad \quad\quad £ 30,000$
D) $£ 80,000 \quad \quad £ 65,000 \quad \quad \quad \quad \quad £ 35,000$

Question

A business has the following balances in its financial records: Income tax £30,000; Selling & administration expenses £80,000; Revenue £350,000; Interest expenses £15,000; Cost of Sales £190,000. Which of the following is correct? $\text { Gross profit } \quad \text { Operating profit } \quad \text { Net profit after tax }$
A) $£ 160,000  \quad \quad\quad £ 80,000 \quad \quad \quad \quad \quad £ 35,000$
B) $£ 80,000  \quad \quad\quad £ 65,000 \quad \quad \quad \quad  \quad £ 35,000$
C) $£ 160,000 \quad \quad £ 65,000  \quad \quad \quad \quad\quad £ 30,000$
D) $£ 80,000 \quad \quad £ 65,000 \quad \quad \quad \quad \quad £ 35,000$

Quizplus · Accepted Answer

Gross profit is calculated as Revenue - Cost of Sales = £350,000 - £190,000 = £160,000. Operating profit is Gross profit - Selling & administration expenses = £160,000 - £80,000 = £80,000. Net profit after tax is Operating profit - Interest expenses - Income tax = £80,000 - £15,000 - £30,000 = £35,000.

A Business Has the Following Balances in Its Financial Records Gross profit Operating profit Net profit after tax \text { Gross profit } \quad \text { Operating profit } \quad \text { Net profit after tax } Gross profit Operating profit Net profit after tax

A Business Has the Following Balances in Its Financial Records $\text { Gross profit } \quad \text { Operating profit } \quad \text { Net profit after tax }$