Question

The following information is taken from the financial statements of Clybourn Company for the current year: Current Assets $ 400,000 Total Assets 895,000 Cost of Goods Sold 655,000 Gross Profit 205,000 Net Income 125,000 The gross profit percentage for the current year rounded to the nearest whole percent is closest to:

Answer 1

Answer: 24%

Explanation:

The following information can be gotten from the question:

Current Assets = $ 400,000

Total Assets = 895,000

Cost of Goods = Sold 655,000

Gross Profit = 205,000

Net Income = 125,000

Gross profit percent will be:

Gross profit/(Gross profit + cost of goods sold) × 100

= 205,000/(205,000 + 655,000) × 100

= 205000/860,000 × 100

= 23.8%

= 24%