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Question - Botox Facial Care had earnings after taxes of $370,000 in 20X1 with 200,000 shares of stock outstanding. The stock price was $31.50. In 20X2, earnings after taxes increased to $436,000 with the same 200,000 shares outstanding. The stock price was $42.00.
a. Compute earnings per share and the P/E ratio for 20X1. The P/E ratio equals the stock price divided by earnings per share.
b. Compute earnings per share and the P/E ratio for 20X2.
Illustrate the effect on the accounts and financial statements of the adjustment for uncollectible accounts using the percent of sales method
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