Question

During 2008, D corp. generated revenues of Rs.60,000. The company's expenses were as follows: cost of goods sold of Rs.30,000, rnoperating
expenses of Rs.12,000 and rna loss on the sale of equipment of Rs.2,000, rnthe net income will be?
Rs.60000
O Rs.30000
O Rs. 18000
Rs. 16000​

Answer 1

Operating profit ratio of a company can be determined by comparing operating profit with the net sales. It shows the end of the management in running the business. It is calculated as:

Operating Profit ratio = (Operating Profit/ Net Sales)x 100

= (Sales - operating expenses - cost of goods sold/ Net

Sales) x 100

= (60,000-20,000-30,000/60,000)x100

= (10,000/60,000)x100 = 16.67%

I hope this helps you

Answer 2

Given:

Total revenue is Rs.60,000 and cost of goods sold of Rs.30,000, operating

expenses of Rs.12,000 and rna loss on the sale of equipment of Rs.2,000,

Solution:

Know that,

Net income = Total Revenue - Total expenses

$\[\begin{array}{l} = Rs.60,000 - Rs.\left( {30,000 + 12000 + 2000} \right)\\ = Rs.60,000 - Rs.44,000\\ = Rs.16,000\end{array}\]$

Hence the net income will be Rs. 16000.