Use This Balance Sheet and Income Statement for the First

question 98

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 debt to equity ratio for Layton Novelties is

• A) 16-2/3 percent.
• B) 20 percent.
• C) 80 percent.
• D) 83-1/3 percent.

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Political Tactic

A strategy or action aimed at gaining advantage or power within a political or organizational context.

Consideration

In contract law, something of value exchanged between parties that is necessary for a valid contract.

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Actions, attitudes, and practices exhibited by leaders, influencing their effectiveness in guiding, inspiring, and managing others.

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Variations in rank or standing among individuals or groups that can influence interactions, access to resources, and perceptions.