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

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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Definitions:

Males

Refers to the male gender or sex, one of the biological categories distinguished by the XY chromosome pair, reproductive anatomy, and secondary sexual characteristics.

Gender Gap

The disparity between men and women in various aspects such as wages, employment, education, and political representation.

Developing Countries

Nations with a lower level of industrialization, lower living standards, and lower Human Development Index than developed countries.

Higher Income

A level of personal or family earnings that is above average.