Ambiguous expense figures lead to inconsistent profit calculation

Steps:

• Calculate cost of sales using 25% mark-up on cost: cost of sales = revenue ÷ 1.25 = 700,000 ÷ 1.25 = 560,000.
• Calculate gross profit: revenue - cost of sales = 700,000 - 560,000 = 140,000.
• Identify operating expenses: administrative expenses + distribution costs = 320,000 + 250,000 = 570,000 (dividend paid 60,000 is appropriation, not operating).
• Calculate profit from operations: gross profit - operating expenses = 140,000 - 570,000 = -430,000 (negative result contradicts positive options).

Why B is correct:

• Not enough information (ambiguous expense scale and incomplete dividend sentence prevent matching any option).

Why the others are wrong:

• A assumes dividends as operating expense without COS adjustment.
• C assumes gross profit minus admin only, ignoring distribution.
• D assumes 25% gross margin on sales minus operating expenses.

Final answer: Not enough information.