Question 7-9

1/1 Issued 10,000 shares of common stock with a part value of $1 for $510,000. 2/1 Pay $150,000 for equipment, 10 year useful life, straight line depreciation. Assume full year depreciation in year 1. 3/1 Signs a 5-year headquarters lease, paying full amount of $500,000 upfront. 3/15 Deliver services to client and bill in full for $775,000 (client will pay at a later date). 5/1 Purchase $100,000 worth of supplies on credit. By 12/31 $50,000 of supplies are left 8/1 Receive $2,000,000 in advance payment from a client for services that will be performed by Giant Telecom. in 2024. 10/1 Declare $40,000 in dividends to be paid in 2024. 11/1 Purchase $650,000 in inventory. 12/1 Pay $25,000 of the 5/1 purchase of supplies.

7. What is 2023 Net Income (Loss)?

a. $710,000

b. $725,000

c. $626,667

d. $2,710,000

e. None of the above

8. What is end of year retained earnings?

a. $586,667

b. $626,667

c. $0

d. $40,000

e. None of the above

9.What is the journal entry on 10/1 related to dividends?

a. Dividends 40,000

Cash 40,000

b. Cash 40,000

Dividends 40,000

c. Dividends 40,000

Dividends payable 40,000

d. Dividend expense 40,000

Dividends payable 40,000

e. Dividend expense 40,000

Cash 40,000

Group of answer choices

a.

b.

c.

d.

e.