The Balance Sheet of Sound Designs Reports Total Assets of $750,000

question 70

Multiple Choice

The balance sheet of Sound Designs reports total assets of $750,000 and $800,000 at the beginning and end of the year,respectively.Sales revenues are $1.5 million ($1.2 million in the previous year) ,net income is $150,000,and net cash flows from operating activities are $175,000.What is Sound Designs' cash flow to sales?

• A) 22.6%.
• B) 11.7%.
• C) 14.6%.
• D) 13.0%.

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Definitions:

FIFO

"First In, First Out," an inventory valuation method where goods first bought are the first ones sold, affecting the cost of goods sold and inventory on financial statements.

Ending Inventory

The total value of a company's merchandise, raw materials, and finished and unfinished products which have not yet been sold at the end of an accounting period.

Perpetual Inventory System

An accounting method that records inventory purchases and sales in real time, providing a continuous account of inventory levels.