This is a false statement.
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Answer:
B. $0
Explanation:
he transaction between Lin and Zee appears to be a conditional sale. The reason being that zee hardware has the right to return the machine if unable to resell it. According to their agreement, should Zee hardware return the machine, its obligation to Lin will be zero.
As per Lin's assessment, and based on their previous transactions, the probability of Zee returning the machine is very high. Lin is sure that Zee hardware will not sell the machine. For this reason, Lin should not record the transactions as a sale.
Answer and Explanation:
The preparation of the income statement is presented below:
Service Revenue 340,000
Less:
Salaries Expense 240,000
Rent Expense 12,000
Depreciation Expense 24,000
Interest Expense 3,400
Net income $60,600
Hence, we simply deduct the expenses from the service revenue so that we get the net income
The answer is 2009 alright.
