A corporation had the following items in its income statement: sales revenue $ 4
ID: 2734083 • Letter: A
Question
A corporation had the following items in its income statement: sales revenue $ 400, 000 total operating expenses $ 100, 000 income tax expense $25,000 net income $25,000 The corporation's net asset position at the beginning of the year was $400, 000 and at the end of the year was $ 600, 000. $200, 000 $225,000 $425,000 $600, 000 none of the above Using the same information as given in question(3) immediately above, the corporate's cost of goods sold for the year was which of the following? $25,000 $50, 000 $150, 000 $250, 000 none of the above At the beginning of 2015, a corporate had assets of $540, 000 and liabilities of $320, 000. During the year, assets increased by $50, 000 and liabilities decreased by $10, 000. Which of the following is the total amount of shareholder's equity at the end of 2015?Explanation / Answer
3
Asset position at the beginning = $400000, shareholder equity at beginning = $400000
Net income = $25000
Corporations shareholder equity at the end of the year = shareholder equity at beginning + Net income
= 400000 + 25000
= $425000
ANSWER = C) $425000
4
Net income = sales revenue - COGS – total operating expense – income tax expense
COGS = sales revenue – total operating expense – income tax expense – net income
= 400000 – 100000 – 25000 -25000
= 250000
ANSWER= d) 250000
5
Assets at end = 540000 + 50000 = 590000
Liabilities at end = 320000-10000 = 310000
Shareholders equity at end o f 2015 = 590000 -310000
= 280000
ANSWER = B) 280000
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