Question

During the second quarter of the year, Wallace Enterprises received $30,000 from customers in exchange for providing electronic components. During the same time, supplies were $5,000, interest expenses were $1,000, and wages were $15,000. On an income statement, the company would declare which of the following?
a. $16,000 expenses
b. $9,000 net loss
c. $21,000 expenses
d. $30,000 net income

Answer 1

Answer:

On an income statement, the company would declare c. $21,000 expenses

Explanation:

Wallace Enterprises received $30,000 from customers in exchange for providing electronic components. Income from the exchange was $30,000

During the second quarter of the year, total expense = supplies expense + interest expenses + wages expense = $5,000 + $1,000 + $15,000 = $21,000

Income from the exchange - total expense = $30,000 - $21,000 = $9,000>0

The company recognizes gain $9,000.

On an income statement, the company would declare $21,000 expenses