Question 9 (a) If operations for an accounting period resulted in cash sales of

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Question 9
(a) If operations for an accounting period resulted in cash sales of $25,000, sales on account of $30,000, and expenses paid in cash of $50,000, did the business incur a net income or a net loss for the period?

(b) What is the amount of net income or net loss?

(c) If liabilities are $65,000 and owner’s equity is $35,000, the amount of the assets is:

(d) If assets are $205,000 and owner’s equity is $75,000, the amount of the liabilities is:

Question 10
The following items were available for sale during the year:

Beginning inventory ........................................... 10 units at $61

First purchase ...................................................... 40 units at $62

Second purchase ................................................. 35 units at $65

Third purchase .................................................... 15 units at $63

(a) Based on the periodic system, the total cost of the 23 units in inventory at the end of the year, according to the first-in, first-out (FIFO) method is:

(b) Based on the data, the total cost of the 23 units in inventory for the last-in, first-out (LIFO) method is:

Explanation / Answer

5000

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