Which of the following statements is false when a company sells inventory costing $700 for $1,200...
Which of the following statements is false when a company sells inventory costing $700 for $1,200 cash and operating expenses are $200?
A. Cost of goods sold is $700.
B. Gross profit is $500.
C. Net sales increase $500.
D. Stockholders' equity increases by net income of $300.
Homework Answers
Net sales will increase by $1200 and not $500, so the false statement is:
C. Net sales increase $500.
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Building Supply sells various building materials to retail outlets.
Listed below are its financial statements for the past two
years.
The company, MBS, has just
approached State Bank requesting a $300,000 short-term loan for
working capital purposes. Would you make the loan? Use the
information provided above to help make your decision. Use as many
ratios as needed.
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