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:

Long-Term Memory Storage

The process of retaining information over extended periods, ranging from days to a lifetime.

Frontal Lobes

The part of the brain located at the front of each cerebral hemisphere, responsible for voluntary movement, expressive language, and managing higher level executive functions.

Three-Stage Model

A model that describes memory processing in three distinct stages: sensory memory, short-term (or working) memory, and long-term memory.

Memory Storage

The process by which information is encoded, stored, and retrieved in the brain, forming the basis for learning and remembering.