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Use This Balance Sheet and Income Statement to Answer the Following

question 115

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. $\begin{array}{c} \text {Abner Systems, Inc.}\\ \text {Income Statement}\\ \text {For the Year Ended December 31, 2010}\\\begin{array}{llr} \text { Net sales } &\$24,000\\ \text { Costs of goods sold } &8,000\\ \text { Gross margin } &\$16,000\\ \text { Operating expenses} &8,000\\ \text {Income before income taxes } &\$8,000\\ \text { Income taxes } &3,200\\ \text { Net income} &\$4,800\end{array}\end{array}$

$Use this balance sheet and income statement to answer the following question.Use ending balances whenever average balances are required for computing ratios. \begin{array}{c} \text {Abner Systems, Inc.}\\ \text {Income Statement}\\ \text {For the Year Ended December 31, 2010}\\ \begin{array}{llr} \text { Net sales } &\$24,000\\ \text { Costs of goods sold } &8,000\\ \text { Gross margin } &\$16,000\\ \text { Operating expenses} &8,000\\ \text {Income before income taxes } &\$8,000\\ \text { Income taxes } &3,200\\ \text { Net income} &\$4,800 \end{array}\end{array} The return on equity for Abner Systems is A) 40 percent. B) 67 percent. C) 47 percent. D) 32 percent.$ The return on equity for Abner Systems is

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