Question
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
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