Fulton Company Has the Following Data Available If a Common Size Income Statement Were Prepared,what Percentage Would

question 69

Multiple Choice

Fulton Company has the following data available:
$\begin{array}{l}\text { Wage Expense, For the Year Ending December 31, 2X13} & \$95 \\\text { Wage Expense, For the Year Ending December 31,2 X 12}& \$90 \\\text { Sales, For the Year Ending December 31, 2X13}& \$900 \\\text { Sales, For the Year Ending December 31, 2X12}& \$800 \\\text { Net Income, For the Year Ending December 31, 2X13}& \$130 \\\text { Net Income, For the Year Ending December 31, 2X12}& \$ 110\\\end{array}$ If a common size income statement were prepared,what percentage would be attributable to the 2X12 wage expense of Fulton Company?

• A)10.5%
• B)81.8%
• C)46.2%
• D)58.1%
• E)11.3%

---

Definitions:

Money Claims

Legal rights or entitlements to a certain amount of money, which can be the result of debts, damages, or other financial obligations owed to a person or entity.

Allowance Method

An accounting technique used to estimate and account for potential uncollectible accounts receivable.

Direct Write-off Method

An accounting practice where uncollectible accounts receivable are directly removed from the books at the time they are deemed nonrecoverable.

Days' Sales in Receivables

A financial ratio that measures the average number of days that receivables remain outstanding before being collected.