Use This Balance Sheet and Income Statement for the FirstThe Current Ratio for Layton Novelties Is A) 1

The Answer of Use This Balance Sheet and Income Statement for the FirstThe Current Ratio for Layton Novelties Is A) 1

Use This Balance Sheet and Income Statement for the FirstThe Current Ratio for Layton Novelties Is A) 1

The Answer of Use This Balance Sheet and Income Statement for the FirstThe Current Ratio for Layton Novelties Is A) 1

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Use This Balance Sheet and Income Statement for the First

question 40

Multiple Choice

Use this balance sheet and income statement for the first year of operations for Layton Novelties,Inc.to answer the following question.Use ending balances whenever average balances are required for computing ratios. $Use this balance sheet and income statement for the first year of operations for Layton Novelties,Inc.to answer the following question.Use ending balances whenever average balances are required for computing ratios. \begin{array}{c} \text {Abner Systems, Inc.}\\ \text {Income Statement}\\ \text {For the Year Ended December 31, 2010}\\\begin{array}{lr} \text { Net sales } & \$ 80,000 \\ \text { Costs of goods sold } & \underline{32,000} \\ \text { Gross margin } & \$ 48,000 \\ \text { Operating expenses } & \underline{12,000}\\ \text { Income before income taxes }&\$36,000 \\ \text { Income taxes }& \underline{14,400}\\ \text {Net income } & \$21,600 \end{array}\end{array} The current ratio for Layton Novelties is A) 1.75. B) .57. C) 1.4. D) 2.0.$ $\begin{array}{c}\text {Abner Systems, Inc.}\\\text {Income Statement}\\\text {For the Year Ended December 31, 2010}\\\begin{array}{lr}\text { Net sales } & \$ 80,000 \\\text { Costs of goods sold } & \underline{32,000} \\\text { Gross margin } & \$ 48,000 \\\text { Operating expenses } & \underline{12,000}\\\text { Income before income taxes }&\$36,000 \\\text { Income taxes }& \underline{14,400}\\ \text {Net income } & \$21,600 \end{array}\end{array}$
The current ratio for Layton Novelties is

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