A business person starts a retail company by contributing ($100,000) cash. The company then buys inventory for
Question:
A business person starts a retail company by contributing \($100,000\) cash. The company then buys inventory for \($90,000,\) has sales of \($150,000,\) cost of goods sold of \($80,000,\) salaries of \($30,000,\) rental of \($12,000,\) advertising expenses of \($8,000,\) and equipment purchases of \($40,000.\) All of the transactions, except the purchase of equipment, are for cash. The financial statements of the company would show
a. Profit of \($20,000,\) cash of \($30,000,\) and equity of $100,000
b. Profit of \($20,000,\) cash of \($110,000,\) and equity of $120,000
c. Profit of \($10,000,\) cash of \($110,000,\) and equity of $120,000
d. Loss of \($70,000,\) cash of \($110,000,\) and equity of $30,000
Step by Step Answer:
Accounting For Managers Interpreting Accounting Information For Decision Making
ISBN: 9781118037966
1st Canadian Edition
Authors: Paul M. Collier, Sandy M. Kizan, Eckhard Schumann