Choose the right answer only:

1) The following information is taken from Milburn's 20X2 income statement: Pre-tax income, +$12,000; Total operating expenses, $20,000; Sales, $120,000. Calculate the cost of sales. Question 8 options:

$88,000

$100,000

$108,000

112,000

2) XYZ Company received $12,000 in cash on August 1, 20X7 for one year's prepaid rent and recorded the transaction by crediting it to the income statement rental income. The adjusting entry for December 31, 20X7 is as follows Question options:

debit cash $7,000 and credit deferred lease proceeds, $7,000.

debit lease proceeds $7,000 and credit deferred lease proceeds $7,000.

debit deferred lease proceeds $5,000 and credit lease proceeds $5,000.

debit lease proceeds, $5,000 and credit deferred lease proceeds, $5,000.