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A company reports the following account balances at year-end: Account Balance Long-term debt $200,000 Cash 50,000 Net sales 600,000 Fixed assets (net) 320,000 Tax expense

A company reports the following account balances at year-end:

Account

Balance

Long-term debt

$200,000

Cash

50,000

Net sales

600,000

Fixed assets (net)

320,000

Tax expense

67,500

Inventory

25,000

Common Stock

100,000

Interest expense

20,000

Administrative expense

35,000

Retained earnings

150,000

Accounts payable

65,000

Accounts receivable

120,000

Cost of goods sold

400,000

Depreciation expense

10,000

Additional Information:

The opening balance of common stock was $100,000

The opening balance of retained earnings was $82,500

The company had 10,000 common shares outstanding all year

No dividends were paid during the year

For the year just ended, the company has gross margin of

A. 33.3% B. 27.5% C. 24.0% D. 22.7%

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