The Balance Sheet of California Clothing Reports Total Equity of $600,000

question 112

Multiple Choice

The balance sheet of California Clothing reports total equity of $600,000 and $700,000 at the beginning and end of the year,respectively.Net income and sales for the year are $65,000 and $1,300,000,respectively.What is California Clothing's return on equity?

• A)10%.
• B)20%.
• C)200%.

Calculate net realizable value of receivables and understand its significance in financial reporting.

Understand the impact of sales returns, allowances, and credit card discounts on gross profit calculation.

Prepare adjusting entries related to uncollectible accounts and understand their impact on financial statements.

Understand the effect of changes in accounts receivable on cash flow from operating activities.

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