DONALD RUDDY COMPANY Adjusted Account Balances For the Year Ended December 31, 20XX

Accounts Payable $ 5,060

Accounts Receivable 5,340

Accumulated DepreciationOffice Equipment 400

Advertising Expense 210

Allowance for Doubtful Accounts 300

Cash 7,170

Depreciation ExpenseOffice Equipment 200

Insurance Expense 140

Merchandise Inventory, January 1, 20XX 5,000

Notes Payable 1,000

Office Equipment 2,000

Office Supplies 90

Office Supplies Expense 210

Prepaid Insurance 190

Purchases 40,000

Purchase Discounts 170

Purchase Returns and Allowances 500

Rent Expense 1,500

Ruddy, Capital 4,100

Ruddy, Drawing 250

Salaries Expense 8,055

Salaries Payable 550

Sales 60,380

Sales Discounts 200

Sales Returns and Allowances 350

Taxes Payable 420

Transportation-in 250

Utilities Expense 385

Vehicle 1,340

Note: The ending merchandise inventory on December 31, 20XX, was $3,000.

1. The cost of goods sold is

A. $44,580.

B. $41,580.

C. $38,580.

D. $33,580.

2. The net cost of purchases are

A. $39,080.

B. $39,580.

C. $39,750.

D. $39,830.

3. The cost of goods available for sale is

A. $39,080.

B. $39,330.

C. $41,580.

D. $44,580.

4. Net sales for the period amount to

A. $59,830.

B. $60,180.

C. $60,380.

D. $60,930.

5. What are the total operating expenses?

A. $10,105

B. $10,490

C. $10,700

D. $11,000