All balances are as of 12/31/2017 unless specified otherwise. Loss on the Sale o
ID: 2408825 • Letter: A
Question
All balances are as of 12/31/2017 unless specified otherwise.
Loss on the Sale of Equipment
62,250
Income Tax Expense
48,750
Short Term Investments
1,500
Inventory
97,500
Retained Earnings, 1/1/17
281,000
Gain on Sale of Equipment
27,500
Goodwill
50,000
Cost of Goods Sold
204,000
Common Stock
???
Notes Payable 5/1/18
12,500
Cash
70,000
Sales Revenue
447,500
Accumulated Depreciation
50,000
Dividends
10,000
Notes Payable, due 12/31/19
104,500
Prepaid Expenses
2,500
Furniture
83,000
Accrued Expenses
28,000
Equipment
372,500
Accounts Receivable
42,000
Operating Expenses
43,000
Accounts Payable
36,000
Working Capital as of December 31, 2017.
137,000
Retained Earnings and Cash as of 12/31/2017.
Retained Earnings Cash
$388,000 $70,000
Total Liabilities as of 12/31/2017.
$181,000
Income from Operations for 2017.
$200,500
Total Assets as of 12/31/2017.
$669,000
1 points
QUESTION 10
Determine the Profit Margin for the year ended December 31, 2017.
26%
54%
382%
$243,500
Loss on the Sale of Equipment
62,250
Income Tax Expense
48,750
Short Term Investments
1,500
Inventory
97,500
Retained Earnings, 1/1/17
281,000
Gain on Sale of Equipment
27,500
Goodwill
50,000
Cost of Goods Sold
204,000
Common Stock
???
Notes Payable 5/1/18
12,500
Cash
70,000
Sales Revenue
447,500
Accumulated Depreciation
50,000
Dividends
10,000
Notes Payable, due 12/31/19
104,500
Prepaid Expenses
2,500
Furniture
83,000
Accrued Expenses
28,000
Equipment
372,500
Accounts Receivable
42,000
Operating Expenses
43,000
Accounts Payable
36,000
Explanation / Answer
Answer to Question 10:
Net Income = Sales Revenue + Gain on Sale of Equipment - Loss on the Sale of Equipment - Operating Expenses - Income Tax Expense - Cost of Goods Sold
Net Income = $447,500 + $27,500 - $62,250 - $43,000 - $48,750 - $204,000
Net Income = $117,000
Profit Margin = Net Income / Sales Revenue
Profit Margin = $117,000 / $447,500
Profit Margin = 26%
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