Sales Revenue Is $367,810 While Sales Returns and Allowances and Sales

question 109

Multiple Choice

Sales revenue is $367,810 while sales returns and allowances and sales discounts total $24,180.The cost of goods sold is $216,490,operating and other expenses are $28,500,and the company pays $31,640 in income tax.Which of the following is true?

• A)Net sales is $343,630 and gross profit is $98,640.
• B)Net sales is $67,000 and gross profit is $98,640.
• C)Net sales is $343,630 and gross profit is $127,140.
• D)Net sales is $367,810 and gross profit is $67,000.

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Definitions:

Equity Ownership

Equity ownership denotes the holding of shares in a company, thereby providing the shareholder a claim on a portion of the corporation's assets and earnings.

Corporate Takeover

The acquisition of one company by another, through either direct purchase or by acquiring a majority stake in the target company’s equity.

P/E Ratio

The price-to-earnings ratio, a measure of a company's current share price relative to its per-share earnings.

Debt-equity Ratio

A measure of a company's financial leverage calculated by dividing its total liabilities by its shareholder equity, indicating how much debt is used to finance assets.