Use This Balance Sheet and Income Statement for the First

question 90

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. $\begin{array}{c}\text {Abner Systems, Inc.}\\\text {Income Statement}\\\text {For the Year Ended December 31, 2010}\\\begin{array}{lr}\text { Net sales } & \$ 80,000 \\\text { Costs of goods sold } & \underline{32,000} \\\text { Gross margin } & \$ 48,000 \\\text { Operating expenses } & \underline{12,000}\\\text { Income before income taxes }&\$36,000 \\\text { Income taxes }& \underline{14,400}\\ \text {Net income } & \$21,600 \end{array}\end{array}$
The total amount of working capital of Layton Novelties is

• A) $8,000.
• B) $28,000.
• C) $12,000.
• D) $4,000.

---

Definitions:

Depression

A medical condition characterized by persistent feelings of sadness, hopelessness, and a lack of interest in activities, often accompanied by physical symptoms.

Detailed Instructions

Comprehensive and precise directions provided to ensure a task is performed correctly and effectively.

Blood Glucose

The concentration of sugar in the blood, crucial for diagnosing and managing diabetes.

Antidepressant Drugs

Medications used to treat depression and other conditions by altering chemical levels in the brain to improve mood and emotions.