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During 2010, Yoder Enterprises generated revenues of $60,00

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1. During 2010, Yoder Enterprises generated revenues of $60,000. The company's expenses were as follows: cost of goods sold of $30,000, operating expenses of $12,000 and a loss on the sale of equipment of $2,000.

Yoder's income from operations is

$18,000.

$60,000.

$30,000.

$12,000.

2. Rusthe Company showed the following balances at the end of its first year:

Cash $7,000
Prepaid insurance 700
Accounts receivable 3,500
Accounts payable 2,800
Notes payable 4,200
Denton, Capital 1,400
Denton, Drawing 700
Revenues 21,000
Expenses 17,500

What did Rusthe Company show as total credits on its trial balance?

$30,800

$29,400

$28,700

$30,100

3. James Corporation purchased a one-year insurance policy in January 2010 for $48,000. The insurance policy is in effect from May 2010 through April 2011. If the company neglects to make the proper year-end adjustment for the expired insurance

Net income and assets will be understated by $16,000.

Net income and assets will be overstated by $16,000.

Net income and assets will be understated by $32,000.

Net income and assets will be overstated by $32,000.

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Solution Summary

During 2010, Yoder Enterprises generated revenues of $60,000. The company's expenses were as follows: cost of goods sold of $30,000, operating expenses of $12,000 and a loss on the sale of equipment of $2,000.

Yoder's income from operations is

$18,000.

$60,000.

$30,000.

$12,000.

2. Rusthe Company showed the following balances at the end of its first year:

Cash $7,000
Prepaid insurance 700
Accounts receivable 3,500
Accounts payable 2,800
Notes payable 4,200
Denton, Capital 1,400
Denton, Drawing 700
Revenues 21,000
Expenses 17,500

What did Rusthe Company show as total credits on its trial balance?

$30,800

$29,400

$28,700

$30,100

3. James Corporation purchased a one-year insurance policy in January 2010 for $48,000. The insurance policy is in effect from May 2010 through April 2011. If the company neglects to make the proper year-end adjustment for the expired insurance

Net income and assets will be understated by $16,000.

Net income and assets will be overstated by $16,000.

Net income and assets will be understated by $32,000.

Net income and assets will be overstated by $32,000.

Solution Preview

During 2010, Yoder Enterprises generated revenues of $60,000. The company's expenses were as follows: cost of goods sold of $30,000, operating expenses of $12,000 and a loss on the sale of equipment of $2,000.

Yoder's income from operations is 18,000.

$18,000. <-- this is the correct answer. ...

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