Use the Information Below to Answer the Following Question(s)

question 181

Multiple Choice

Use the information below to answer the following question(s) .The following information pertains to Payton's Shoe Manufacturing:
99,500 pairs of shoes are sold during the year for $18.
-What is the amount of Payton's gross profit?

• A)$995,000
• B)$1,000,000
• C)$1,791,000
• D)$796,000
• E)$896,000

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Definitions:

Credit Sales

Credit sales are transactions where the buyer is allowed to pay for goods or services at a later date, extending credit.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered on credit.

Compensating Balance

A minimum balance that must be maintained in a bank account, often required by banks in return for loans or as part of a service agreement.

Effective Interest Rate

The actual interest rate on a loan or investment, taking into account the effect of compounding, fees, and other factors, more accurately reflecting the true cost or yield than the nominal rate.