Garrit Limited's income statement reported the following for the year ended Dec 31, 2019: $$\begin{array} { | l | r | }
\hline \text { Sales revenue } & 881,000 \
\hline \text { Cost of goods sold } & 573,000 \
\hline \text { Expenses } & 129,000 \
\hline \text { Net income } & 179,000 \
\hline
\end{array}$$ Which is the correct statement about the income statement?

Question

Garrit Limited's income statement reported the following for the year ended Dec 31, 2019: $$\begin{array} { | l | r | } 
\hline \text { Sales revenue } & 881,000 \
\hline \text { Cost of goods sold } & 573,000 \
\hline \text { Expenses } & 129,000 \
\hline \text { Net income } & 179,000 \
\hline
\end{array}$$ Which is the correct statement about the income statement?

Quizplus · Accepted Answer

Mark-up on cost is calculated as (Sales Revenue - Cost of Goods Sold) / Cost of Goods Sold. Here, it is (881,000 - 573,000) / 573,000 = 308,000 / 573,000 = 0.5375 or 53.75%.

Garrit Limited's Income Statement Reported the Following for the Year