Day: April 23, 2018

Wood Sparrow Ltd has provided a list of its assets and liabilities as at 31 December 2017 as follows:

• Long-Term Assets £0.8M
• Inventory £0.7M
• Accounts Receivables £0.7M
• Bank Account £0.4M
• Cash £0.1M
• Accounts Payable £0.9M
• Long-term Bank Loan £2M
• Reserves  £0.5M
• Share Capital £0.5M
• Revenue  £10.8M
• Cost-of-Sales  £9M
• Net Profit Margin  £1M
• Purchases  £5.1M

What is Wood Sparrow’s Gross Profit Mark-up Percentage?

Select ONE answer:

1. 20.00
2. 24.14
3. 26.67
4. 31.82
5. 16.66

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 1 – £10.8M – £9M = £1.8M / £9M * 100 = 20%

This work is licensed under a Creative Commons Attribution 4.0 International License.