Shown Below Are Selected Data from the Financial Statements of Supreme

question 126

Multiple Choice

Shown below are selected data from the financial statements of Supreme Co. Dollar amounts are in millions (except for the per share data) .
$$\begin{array}{l}\begin{array} { | l | r | } \hline \text { Income statement data: } & \\\hline \text { Net sales } & \mathbf { \$ 1 , 2 3 0 } \\\hline \text { Cost of goods sold } & \mathbf { 5 2 0 } \\\hline \text { Operating expenses } & \mathbf { 4 4 0 } \\\hline \text { Net income } & \mathbf { \$ 3 9 0 } \\\hline & \\\hline \text { Balance sheet data: } & \\\hline \text { Average total equity } & \mathbf { \$ 2 , 4 0 0 } \\\hline \text { Average total assets } & \mathbf { \$ 4 , 0 0 0 } \\\hline\end{array}\\\\\begin{array} { | l | r | } \hline \text { Income statement data: } & \\\hline \text { Sales } & \$ 1,230 \\\hline \text { Cost of goods sold } & 520 \\\hline \text { Operating expenses } & 440 \\\hline \text { Profit } & \$ 390 \\\hline & \\\hline \text { Balance sheet data: } & \\\hline \text { Average total equity } & \$ 2,400 \\\hline \text { Average total assets } & \$ 4,000 \\\hline\end{array}\end{array}$$
Per share data (these amounts stated in actual dollars, not millions) :
Supreme reported earnings per share for the year of $4 and paid cash dividends of $1 per share. At year end, the Wall Street Journal listed Supreme's shares as trading at $88 per share.
-Refer to the above data. Supreme's gross profit rate was:

• A) 42.9%.
• B) 57.7%.
• C) 20.0%.
• D) Some other amount.

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