]1.

Exhibit 13-1 Xavier Company reported the following income statement and balance sheet amounts on December 31, 2020.

	2020	2019
Net sales revenue (all credit)	$1,700,000
Cost of goods sold	1,040,000
Gross margin	660,000
Selling and general expenses	420,000
Interest expense	60,000
Net income	$ 180,000
Current assets	$ 100,000	$ 90,000
Long-term assets	830,000	800,000
Total assets	$930,000	$890,000
Current liabilities	$ 72,000	$ 56,000
Long-term liabilities	204,000	390,000
Common stockholders equity	654,000	444,000
Total liabilities and stockholders' equity	$930,000	$890,000

Inventory and prepaid expenses account for $50,000 of the 2020 current assets. Average inventory for 2020 is $36,000. Average net accounts receivable for 2020 is $62,000. Average one-day sales are $5,900. There are 12,000 shares of common stock outstanding at the end of 2020. The market price per share of common stock is $27 at the end of 2020. The EPS for 2020 is equal to $15 per share.

Refer to Exhibit 13-1. What is the gross margin ratio for 2020 (rounded to the nearest tenth of a percent)?

A) 63.5%

B) None of the answer choices is correct.

C) 38.8 %

D) 10.6

E) 27.3%

2.

Exhibit 13-1 Xavier Company reported the following income statement and balance sheet amounts on December 31, 2020.

	2020	2019
Net sales revenue (all credit)	$1,700,000
Cost of goods sold	1,040,000
Gross margin	660,000
Selling and general expenses	420,000
Interest expense	60,000
Net income	$ 180,000
Current assets	$ 100,000	$ 90,000
Long-term assets	830,000	800,000
Total assets	$930,000	$890,000
Current liabilities	$ 72,000	$ 56,000
Long-term liabilities	204,000	390,000
Common stockholders equity	654,000	444,000
Total liabilities and stockholders' equity	$930,000	$890,000

Inventory and prepaid expenses account for $50,000 of the 2020 current assets. Average inventory for 2020 is $36,000. Average net accounts receivable for 2020 is $62,000. Average one-day sales are $5,900. There are 12,000 shares of common stock outstanding at the end of 2020. The market price per share of common stock is $27 at the end of 2020. The EPS for 2020 is equal to $15 per share.

Refer to Exhibit 13-1. What is the market capitalization at the end of 2020?

A) $930,000

B) $18,000

C) $324,000

D) $654,000

E) None of the answer choices is correct.

3.

Exhibit 13-1 Xavier Company reported the following income statement and balance sheet amounts on December 31, 2020.

	2020	2019
Net sales revenue (all credit)	$1,700,000
Cost of goods sold	1,040,000
Gross margin	660,000
Selling and general expenses	420,000
Interest expense	60,000
Net income	$ 180,000
Current assets	$ 100,000	$ 90,000
Long-term assets	830,000	800,000
Total assets	$930,000	$890,000
Current liabilities	$ 72,000	$ 56,000
Long-term liabilities	204,000	390,000
Common stockholders equity	654,000	444,000
Total liabilities and stockholders' equity	$930,000	$890,000

Inventory and prepaid expenses account for $50,000 of the 2020 current assets. Average inventory for 2020 is $36,000. Average net accounts receivable for 2020 is $62,000. Average one-day sales are $5,900. There are 12,000 shares of common stock outstanding at the end of 2020. The market price per share of common stock is $27 at the end of 2020. The EPS for 2020 is equal to $15 per share.

Refer to Exhibit 13-1. What is the debt to equity ratio for 2019 (rounded to two decimal places)?

A) 0.88

B) 1.00

C) 0.50

D) None of the answer choices is correct.

E) 0.13