The Following Amounts Were Taken from the Financial Statements of Ando

question 97

Multiple Choice

The following amounts were taken from the financial statements of Ando Company: $\begin{array}{lrr}&2021&2020\\\text { Total assets } & \$ 800,000 & \$ 1,000,000 \\\text { Net sales } & 720,000 & 650,000 \\\text { Gross profit } & 352,000 & 320,000 \\\text { Net income } & 108,000 & 117,000 \\\text { Weighted average number of } & & \\\quad \text { common shares outstanding } & 90,000 & 90,000 \\\text { Market price of common stock } & \$ 42 & \$ 39\end{array}$ The profit margin ratio for 2021 is

• A)14%.
• B)16%.
• C)15%.
• D)18%.

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Definitions:

Post-closing Trial Balance

A list of all company accounts that remain after year-end closing entries have been made, used to verify the balance of debits and credits.

Financial Statements

Structured reports of an entity's financial activities and condition, including the balance sheet, income statement, statement of cash flows, and statement of changes in equity.

Permanent Accounts

Accounts that carry their ending balances over into the next accounting period and are not closed out, such as assets, liabilities, and equity accounts.

Balance Sheet

A document depicting a corporation’s financial standing at a particular instant, outlining its assets, debts, and owner's equity.