Part A-

Sports Unlimited reports net income of $240,000, sales revenue of $24 million, and average assets of 3 million. The profit margin is:

a- 10%.

b- 8%.

c- 12.5%.

d- 1%.

Part B-

A loss due to an employee strike should be reported as:

a- Selling expenses.

b- Discontinued operations.

c- Other revenues and expenses.

d- A separate line item in retained earnings.

Part C-

Which of the following is an example of aggressive accounting?

a- Adjusting the allowance for uncollectible accounts to a larger amount.

b- The write-down of overvalued inventory.

c- Changing to a shorter useful life for depreciating a long-lived asset.

d- Recording the lowest possible warranty expense.