Use This Balance Sheet and Income Statement to Answer the Following

question 15

Multiple Choice

Use this balance sheet and income statement to answer the following question.Use ending balances whenever average balances are required for computing ratios. $\begin{array}{c}\text {Abner Systems, Inc.}\\\text {Income Statement}\\\text {For the Year Ended December 31, 2010}\\\begin{array}{lr}\text { Net sales } & \$ 24,000 \\\text { Costs of goods sold } & \underline{8,000} \\\text { Gross margin } & \$ 16,000 \\\text { Operating expenses } & \underline{8,000}\\\text { Income before income taxes }&\$8,000 \\\text { Income taxes }& \underline{3,200}\\ \text {Net income } & \$4,800 \end{array}\end{array}$

The return on equity for Abner Systems is

• A) 40 percent.
• B) 67 percent.
• C) 47 percent.
• D) 32 percent.

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Definitions:

Specialized Knowledge

Specialized knowledge is expertise or understanding specific to a particular field or area of study, often requiring advanced education or experience to acquire.

Software Tools

Various applications or programs used to perform tasks or functions on a computer, ranging from productivity to development tools.

Manufacturing Plant

A facility where goods are produced in large quantities through the use of machinery, labor, and processes.

Time Division

The segmentation or allotment of time into distinct periods, often used in scheduling or prioritizing tasks.