Question 31 (1.5 points)

The Orosco Company has 50 items in its inventory on June 6^th that each cost $42 when purchased. When the Orosco Company sells 30 of these items on June 9^th at a price of $75 each, which of the following is true?

Question 31 options:

1) Gross Profit increases by $1,260

2) Gross Profit increases by $1,550

3) Gross Profit increases by $990

4) Gross Profit decreases by $1,550

Question 32 (1.5 points)

Martin, Inc. purchased a piece of land for $30,000 on which it intended to build a warehouse. Two years later, Martin decided instead to lease an existing warehouse and sold the land for $40,000. Which of the following is true with regard to the sale of the land?

Question 32 options:

1) The sale will result in a loss of $10,000 being recorded

2) The sale will result in revenues of $40,000 being recorded

3) The sale will result in a gain of $10,000 being recorded

4) The sale will result in cost of goods sold of $30,000 being recorded

Question 33 (1.5 points)

Company Y pays cash for an insurance policy on September 30, 2020 that will provide coverage for the next two years for its business operations. The adjusting entry on December 31, 2020 will result in what changes?

Question 33 options:

1) Current liabilities will increase

2) Current assets will stay the same

3) Expenses will increase

4) Revenues will increase

Question 34 (1.5 points)

The sale of which of the following assets results in revenues being recorded?

Question 34 options:

1) Property, plant and equipment

2) Inventory

3) Patents

4) Accounts payable

Question 35 (1.5 points)

Wholesome, Inc. has 150,000 outstanding shares of common stock and the board of directors declares a $.50 per share dividend on December 1, 2020 that will be paid on December 31,2020. The impact on the financial statements for 2020 of this dividend will be what as of December 31, 2020?

Question 35 options:

1) Cash will increase $75,000

2) Current liabilities will increase $75,000

3) Stockholders equity will decrease $150,000

4) Retained Earnings will decrease $75,000