Question

1-A company had net sales of $760,200 and cost of goods sold of $547,400. Its net income was $19,340. The company's gross margin ratio equals:

• 18.2%

• 25.4%

• 28.0%

• 35.3%

• 38.9%

  2-The monetary unit assumption means that all companies doing business in the United States must express transactions and events in US dollars.

• true or false

  3-Paid-in capital is the total amount of cash and other assets the corporation receives from its stockholders in exchange for its stock.

• true or false

Answer 1

1) Solution: 28%

Working: Gross margin = (Total revenue-COGS) / Total revenue

                          = (760,200 - 547,400) / 730,200

                         = 212,800 / 760,200

                        = 27.99% or 28%

2) Solution: False

Explanation: The monetary unit assumption means only those transactions and events should be recorded in books of accounts of an entity which can be expressed and measured in monetary terms

3) Solution: True

Explanation: Paid-in capital refers to total cash amount and other assets it receives from its stockholders in its stock exchange.