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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 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. ...

    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.

    $2.19

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