Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Tenisa's friend Carma owns a floral shop, Petunias & Petals. Carma does the bookkeeping herself and is working on creating an income statement. The

1. Tenisa's friend Carma owns a floral shop, Petunias & Petals. Carma does the bookkeeping herself and is working on creating an income statement. The company has the following account balances at the end of the year:

Interest Expense $45,000

Other Non-Operating Income $58,000

Cost of Goods Sold $404,000

Administrative Expenses $45,000

Revenues $542,000

Income Taxes $16,000

Marketing Expenses $30,000

Depreciation Expense $2,000

What is the company's gross profit?

2. Tenisa's friend Carma owns a floral shop, Petunias & Petals. Carma does the bookkeeping herself and is working on creating an income statement. The company has the following account balances at the end of the year:

Interest Expense $45,000
Other Non-Operating Income $58,000
Cost of Goods Sold $404,000
Administrative Expenses $45,000
Revenues $542,000
Income Taxes $16,000
Marketing Expenses $30,000
Depreciation Expense $2,000

What is the company's net income?

3. Below is a trial balance (adjusted) prepared by Comfy Home's accountant in the process of creating the financial statements for June 30, 2015 (six months). Based on the amounts shown, which of the following statements are true (choose all that apply)?

ACCOUNTS

DEBIT

CREDIT

Cash

$44,000

Accounts Receivable

$58,000

Inventory

$41,000

Building & equipment

$230,000

Accumulated depreciation

$6,000

Bank loan

$55,000

Accounts payable

$9,000

Utility expenses payable

$3,000

Income taxes payable

$6,000

Paid-in-capital

$250,000

Retained earnings

$22,000

Revenues

$205,000

Cost of goods sold

$130,000

Wages

$38,000

Utilities expense

$6,000

Depreciation expense

$1,000

Income tax expense

$8,000

Total

$556,000

$556,000

Group of answer choices

a. Utility expense for the six-month period is $3,000

b. Net income for the six-month period is $22,000

c. Income taxes due, but not yet paid to the IRS (US Internal Revenues Service) are $8,000

d. Building and equipment, net of accumulated depreciation, is $224,000

e. The balance of Comfy Homes loan from the bank is $55,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Managerial Accounting

Authors: Peter Brewer, Ray Garrison, Eric Noreen

9th Edition

1265672008, 978-1265672003

More Books

Students also viewed these Accounting questions