Compute Profit Margin Ratio Given the Following Information

question 175

Multiple Choice

Compute profit margin ratio given the following information.
Cost of Goods Sold $28,000
Net Income 21,400
Gross Profit 400,000

• A)5%
• B)7%
• C)1.65%
• D)6.64%
• E)76.42%

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Definitions:

Held for Sale

Assets or business segments classified as being available for immediate sale and expected to be sold within one year.

Normal Balance

The typical or expected balance of an account in double-entry bookkeeping, which is either debit for assets and expenses or credit for liabilities, equity, and revenue.

Accumulated Depreciation

The total amount of depreciation that has been charged on an asset since it was acquired, representing its decrease in value.

Land Acquired

The process of purchasing land to be used for business operations or investment, which is recorded as a fixed asset on the balance sheet.