On Jan. 1, XYZ started a new business. The shareholders made an initial cash investment of $1,000,000. During the year, the company provided $10,500,000 of services to customers. On December 31, XYZ had a balance in Accounts Receivable of $1,200,000. Also, during the year, the company incurred expenses of $8,800,000 and ended the year with a balance in Accounts Payable of $920,000. What is XYZ's income before income taxes for the year, under the Cash and Accrual basis? A. Cash Basis: $9,300,000 Accrual Basis: $10,500,000 B. Cash Basis: $1,700,000 Accrual Basis: $1,420,000 C. Cash Basis: $1,420,000 Accrual Basis: $1,700,000 D. Cash Basis: $500,000 Accrual Basis: $2,620,000 The reed company uses the straight-line method to depreciate its equipment. On May 1, 2007, the company purchased some equipment for $200,000. The equipment is estimated to have a useful life of ten years and a salvage value of $20,000. How much depreciation expense should Reed record for the equipment in the adjusting entry on December 31, 2007? a.$6,000 b.$12,000 c. $13,500
On Jan. 1, XYZ started a new business. The shareholders made an initial cash investment of $1,000,000. During the year, the company provided $10,500,000 of services to customers. On December 31, XYZ had a balance in Accounts Receivable of $1,200,000. Also, during the year, the company incurred expenses of $8,800,000 and ended the year with a balance in Accounts Payable of $920,000. What is XYZ's income before income taxes for the year, under the Cash and Accrual basis? A. Cash Basis: $9,300,000 Accrual Basis: $10,500,000 B. Cash Basis: $1,700,000 Accrual Basis: $1,420,000 C. Cash Basis: $1,420,000 Accrual Basis: $1,700,000 D. Cash Basis: $500,000 Accrual Basis: $2,620,000 The reed company uses the straight-line method to depreciate its equipment. On May 1, 2007, the company purchased some equipment for $200,000. The equipment is estimated to have a useful life of ten years and a salvage value of $20,000. How much depreciation expense should Reed record for the equipment in the adjusting entry on December 31, 2007? a.$6,000 b.$12,000 c. $13,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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