Island Industries,Inc.reported Net Sales of $306,000,Cost of Goods Sold of $192,600,Operating Expenses of $58,900,and Income Tax Expense of 12,300.Island Industries' net income percentage was:
A)37.06.
B)13.79.
C)62.94.
D)17.81.

Question

Quizplus · Accepted Answer

The calculation of net income percentage is as follows:

Net income percentage = (Net income / Net sales) x 100

Net income = (Net sales - Cost of goods sold - Operating expenses - Income tax expense)
Net income = ($306,000 - $192,600 - $58,900 - $12,300)
Net income = $42,200

Net income percentage = ($42,200 / $306,000) x 100
Net income percentage = 13.79%

Therefore, the best choice is B, which is the net income percentage of 13.79%.