Question

QUESTION 27

Here are some items that appear on an income statement.
Operating expenses $2,300 Income taxes $650

Net other (other revenues and gains netted
against other expenses and losses) $800

If the gross profit was $3,000, how much is net income on a multi-step income statement?

		$850
		$50
		$2,350
		$(750)

QUESTION 28

Entity A reported the following items on its balance sheet at the end of the current year. All accounts are listed.
Cash $45,000
Accounts payable 80,000
Property, plant & equipment 200,000
Long-term debt 60,000
Common stock 150,000
Accounts receivable 90,000
Retained earnings ?
Inventory 75,000
What amount will Entity A report on its balance sheet for Total Assets?

		$560,000
		$320,000
		$410,000
		$500,000

QUESTION 29

Which of the following accounts would be closed at the end of the accounting period?

		cash
		sales revenue.
		land.
		accounts payable.

Answer 1

Q27 Answer: $850

Explanation:

Gross profit	$3,000
Operating expenses	($2,300)
Operating income	$700
Net other	$800
Income before income taxes	$1,500
Income taxes	($650)
Net income	$850

Q28 Answer: $410,000

Explanation:

Cash	$45,000
Property,plant and equipment	$200,000
Accounts receivable	$90,000
Inventory	$75,000
Total assets	$410,000

Q29 Answer: Sales revenue

Explanation:

Sales revenue account is to be closed at the end of the accounting period since it is a temporary account. Where as Cash, land and accounts payable are permanent accounts.