Answer:
1. B. a, c, e, f, and h
2. A. $302,000
Explanation:
1. During the month, Identify which of the following items would be reported in the balance sheet.
a. Cash ......................Current Asset in Balance sheet
d. Wage expense
g. Net income...........Retained Earnings in Balance sheet
b. Sales
e. Wages payable....Current liability in Balance sheet
h. Inventory.................Current Asset in Balance sheet
c. Long-term debt......Long term liability in Balance sheet
f. Retained earnings..Shareholders Equity in Balance sheet
i. Cost of goods sold
2. Weimar World, a tax-preparation service, had the following transactions.
* Billed $496,000 in revenues on credit
* Received $164,000 from customers' accounts receivable
* Incurred expenses of $194,000 but only paid $87,700 cash for these expenses
* Prepaid $32,220 for computer services to be used next month
Therefore the company's accrual basis net income for the month will be:
Sales...........................................................$496,000
less: Expenses .........................................<u>$194,000</u>
Net Profit <u>$334,200</u>
