The Following Question(s) Refer to the Year-End Account Balances for UBUS

question 65

Multiple Choice

The following question(s) refer to the year-end account balances for UBUS, Inc. The accounts are listed in alphabetical order, NOT in the order they appear on the financial statements. The applicable tax rate is 40%.
$\begin{array}{l}\text { UBUS Income Statement }\\\begin{array}{ll}\text { Cost of Goods Sold } & 330 \\\text { Depreciation Expense } & 35 \\\text { Interest Expense } & 20 \\\text { Operating Expense (excluding depreciation) } & 115 \\\text { Sales } & 600 \\\text { Tax } & ? ? ?\end{array}\end{array}$
$\begin{array}{l}\text { UBUS Balance Sheet }\\\begin{array}{ll}\text { Accounts Payable } & 35 \\\text { Accounts Receivable } & 65 \\\text { Accruals } & 30 \\\text { Accumulated Depreciation } & (175) \\\text { Cash } & 35 \\\text { Common Stock } & 120 \\\text { Fixed Assets (gross) } & 390 \\\text { Inventory } & 135 \\\text { Long Term Debt } & 200 \\\text { Retained Earnings } & 65\end{array}\end{array}$
-What was UBUS Inc.'s Net Income?

• A)$72
• B)$45
• C)$60
• D)$20
• E)$100

Comprehend the role of vertical contracts in aligning incentives and their impact on prices.

Identify strategies that manufacturers and retailers use to evade regulation.

Understand the importance and impact of promotional activities between manufacturers and retailers.

Recognize the benefits and drawbacks of vertical relationships for consumers, manufacturers, and retailers.

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