Accounting 221

A

A net loss occurs when A) expenses are greater than revenues B) liabilities are greater than assets C) cash inflow is less than cash outflow D) the ending cash balance is lower than the beginning cash balance

A

Garrison Company acquired $23,000 by issuing common stock. Which of the following accurately reflects how this event affects the company's accounting equation? Assets=Liabilities+Common Stock + RetainedEarnings A.23,000 =NA +23,000+NA B.NA=23,000+(23,000)+NA C.NA=NA +23,000+(23,000) D.23,000=NA+NA+23,000

paid, loan, expense, dividend

Give three examples of asset use transactions.

B

Which of the following financial statements provides information about a company as of a specific point in time? A) Income statement B) Balance sheet C) Statement of cash flows D) Statement of changes in stockholders' equity

A

27) The Heritage Company is a manufacturer of office furniture. Which term best describes Heritage's role in society? A) Conversion agent B) Regulatory agency C) Consumer D) Resource owner

A

A company's total assets increased during the period while its liabilities and common stock were unchanged. No dividends were declared or paid during the period. Which of the following would explain this situation? A) Revenues were greater than expenses during the period. B) Retained earnings were less than net income during the period. C) No dividends were paid during the period. D) The company must have purchased assets with cash during the period.

C

Algonquin Company reported assets of $50,000, liabilities of $22,000 and common stock of $15,000. Based on this information only, what is the amount of the company's retained earnings? A) $7,000. B) $57,000. C) $13,000. D) $87,000.

A

As of December 31, Year 1, Mason Company had $500 cash. During Year 2, Mason earned $1,200 of cash revenue and paid $800 of cash expenses. What is the amount of cash that will be reported on the balance sheet at the end of Year 2? A) $900 B) $400 C) $1,700 D) $2,500

D

As of December 31, Year 2, Bristol Company had $100,000 of assets, $40,000 of liabilities and $25,000 of retained earnings. What percentage of Bristol's assets were obtained through investors? A) 60% B) 25% C) 40% D) 35%

A

At the end of Year 2, retained earnings for the Baker Company was $3,500. Revenue earned by the company in Year 2 was $1,500, expenses paid during the period were $800, and dividends paid during the period were $500. Based on this information alone, what was the amount of retained earnings at the beginning of Year 2? A) $3,300 B) $3,700 C) $2,800 D) $3,800

B

At the time of liquidation, Fairchild Company reported assets of $200,000, liabilities of $120,000, common stock of $70,000 and retained earnings of $10,000. What is the maximum amount of Fairchild's assets that the shareholders are entitled to receive? A) $200,000 B) $80,000 C) $90,000 D) $100,000

A

Ballard Company reported assets of $500 and liabilities of $200. What amount will Ballard's report for stockholders' equity? A) $300 B) $500 C) $700 D) Cannot be determined

I NA NA I

Bell Co. provided consulting services for $20,000 cash. Assets = Liabilities + Common Stock + Retained Earnings

A

Borrowing cash from the bank is an example of which type of transaction? A) Asset source B) Claims exchange C) Asset use D) Asset exchange

A

Chico Company experienced an accounting event that affected its accounting equation as indicated below: Assets: + Liabilities: NA Common Stock: + Retained Earnings: NA Which of the following accounting events could have caused these effects on Chico's statements? A) Issued common stock. B) Paid cash expenses. C) Borrowed money from a bank. D) Paid a cash dividend.

C

Chow Company earned $1,500 of cash revenue, paid $1,200 for cash expenses, and paid a $200 cash dividend to its owners. Which of the following statements is true? A) The net cash inflow from operating activities was $100. B) The net cash outflow for investing activities was $200. C) The net cash inflow from operating activities was $300. D) The net cash outflow for investing activities was $100.

B

Delta Company experienced an accounting event that affected its financial statements as indicated below: Assets: - Liabilities: NA Common Stock: NA Retained Earnings: - Which of the following accounting events could have caused these effects on Delta's statements? A) Purchased land for cash. B) Incurred a cash expense. C) Borrowed money from a bank. D) Earned cash revenue.

D

Dividends paid by a company are reported on which of the following financial statement(s)? A) Income statement B) Statement of changes in stockholders' equity C) Statement of cash flows D) Statement of changes in stockholders' equity and statement of cash flows

D

During Year 2, Chico Company earned $1,950 of cash revenue, paid $1,600 of cash expenses, and paid a $150 cash dividend to its owners. Based on this information alone, which of the following statements is not true? A) Net income amounted to $350. B) Total assets increased by $200. C) Cash inflow from operating activities was $350. D) Cash inflow from operating activities was $200.

B

During Year 2, Millstone Company provided $6,500 of services for cash, paid cash dividends of $1,000 to owners, and paid $4,000 cash for expenses. Liabilities were unchanged. Which of the following statements accurately describes the effect of these events on the elements of the company's financial statements? A) Assets increased by $6,500. B) Assets increased by $1,500. C) stockholders' equity increased by $2,500. D) Assets increased by $5,500.

D NA NA D

Epstein Co. paid $20,000 in cash dividends to its owners Assets = Liabilities + Common Stock + Retained Earnings

A

Expenses are reported on which of the following financial statement(s)? A) Income statement B) Balance sheet C) Statement of changes in stockholders' equity D) Income statement and statement of changes in stockholders' equity

A

Financial accounting standards are known collectively as GAAP. What does that acronym stand for? A) Generally Accepted Accounting Principles B) Generally Applied Accounting Procedures C) Governmentally Approved Accounting Practices D) Generally Authorized Auditing Principles

C

Frank Company earned $15,000 of cash revenue. Which of the following accurately reflects how this event affects the company's accounting equation? Assets=Liabilities+Common Stock + RetainedEarnings A. 15,000 = NA + 15,000 + NA B. 15,000 = NA + 7,500 + 7,500 C. 15,000 = NA + NA + 15,000 D. 15,000 = 15,000 + NA +NA

B

Glavine Company repaid a bank loan with cash. The cash flow from this event should be reported as: A) an outflow for investing activities on the Statement of Cash Flows B) an outflow for financing activities on the Statement of Cash Flows C) an inflow for investing activities on the Statement of Cash Flows D) an inflow for operating activities on the Statement of Cash Flows

D

Hazeltine Company issued common stock for $200,000 cash. What happened as a result of this event? A) Assets increased. B) Equity increased. C) Claims increased. D) Assets, claims, and equity all increased.

Financing

If a corporation issues common stock for $50,000 cash, in which section of the statement of cash flows will this transaction be reported?

225,000

If total stockholder's equity is $150,000 and liabilities are $75,000, what are total assets?

C

In which section of a statement of cash flows would the payment of cash dividends be reported? A) Investing activities. B) Operating activities. C) Financing activities. D) Dividends are not reported on the statement of cash flows.

B

International accounting standards are formulated by the IASB. What does that acronym stand for? A) Internationally Accepted Standards Board B) International Accounting Standards Board C) International Accountability Standards Bureau D) International Accounting and Sustainability Board

A

Jackson Company had a net increase in cash from operating activities of $10,000 and a net decrease in cash from financing activities of $2,000. If the beginning and ending cash balances for the company were $4,000 and $11,000, what was the net cash change from investing activities? A) An outflow or decrease of $1,000 B) An inflow or increase of $2,000 C) An inflow or increase of $1,000 D) Zero

B

Jackson Company paid $500 cash for salary expenses. Which of the following accurately reflects how this event affects the company's accounting equation? Assets = Liab. + Equity A. 500 = 500 + NA B. (500) = NA + (500) C. (500) = (500) + NA D. (500) = NA + 500

D

Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions.) 1) Acquired $6,000 cash from issuing common stock. 2) Borrowed $4,400 from a bank. 3) Earned $6,200 of revenues. 4) Incurred $4,800 in expenses. 5) Paid dividends of $800. Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions.) 1) Acquired an additional $1,000 cash from the issue of common stock. 2) Repaid $2,600 of its debt to the bank. 3) Earned revenues, $9,000. 4) Incurred expenses of $5,500. 5) Paid dividends of $1,280. What was the amount of retained earnings that will be reported on Lexington's balance sheet at the end of Year 1? A) $6,200 B) $5,400 C) $1,400 D) $600

A

Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions.) 1) Acquired $6,000 cash from issuing common stock. 2) Borrowed $4,400 from a bank. 3) Earned $6,200 of revenues. 4) Incurred $4,800 in expenses. 5) Paid dividends of $800. Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions.) 1) Acquired an additional $1,000 cash from the issue of common stock. 2) Repaid $2,600 of its debt to the bank. 3) Earned revenues, $9,000. 4) Incurred expenses of $5,500. 5) Paid dividends of $1,280. 78) What was the net cash flow from financing activities reported on Lexington's statement of cash flows for Year 2? A) $2,880 outflow B) $2,880 inflow C) $1,000 outflow D) $1,000 inflow

A

Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions.) 1) Acquired $6,000 cash from issuing common stock. 2) Borrowed $4,400 from a bank. 3) Earned $6,200 of revenues. 4) Incurred $4,800 in expenses. 5) Paid dividends of $800. Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions.) 1) Acquired an additional $1,000 cash from the issue of common stock. 2) Repaid $2,600 of its debt to the bank. 3) Earned revenues, $9,000. 4) Incurred expenses of $5,500. 5) Paid dividends of $1,280. What is the amount of total assets that will be reported on Lexington's balance sheet at the end of Year 1? A) $11,000 B) $12,000 C) $1,600 D) $7,600

B

Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions.) 1) Acquired $6,000 cash from issuing common stock. 2) Borrowed $4,400 from a bank. 3) Earned $6,200 of revenues. 4) Incurred $4,800 in expenses. 5) Paid dividends of $800. Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions.) 1) Acquired an additional $1,000 cash from the issue of common stock. 2) Repaid $2,600 of its debt to the bank. 3) Earned revenues, $9,000. 4) Incurred expenses of $5,500. 5) Paid dividends of $1,280. What was the amount of liabilities on Lexington's balance sheet at the end of Year 2? A) $1,000. B) $1,800. C) ($2,600). D) $480.

B

Li Company paid cash to purchase land. What happened as a result of this business event? A) Total assets decreased. B) Total assets were unaffected. C) Total equity decreased. D) Both assets and total equity decreased.

B

Liabilities are reported on which of the following financial statement(s)? A) Income statement B) Balance sheet C) Statement of cash flows D) Statement of changes in stockholders' equity

D

Mayberry Company paid $30,000 cash to purchase land. What happened as a result of this business event? A) Total equity was not affected. B) The net cash flow from investing activities decreased. C) Total assets were not affected. D) Total assets and total equity were not affected, and net cash flow from investing activities decreased.

The Financial Accounting Standards Board

Name the group that has the primary authority for establishing U.S. GAAP.

I I NA NA

Nguyen Co. borrowed $50,000 cash from Metropolitan Bank Assets = Liabilities + Common Stock + Retained Earnings

I I NA NA

North Co. issued a note to purchase a building. Assets = Liabilities + Common Stock + Retained Earnings

A

On January 1, Year 2, Chavez Company had beginning balances as follows: total assets of $12,500, total liabilities of $4,500, and common stock of $3,000. During Year 2, Chavez paid dividends to its stockholders of $2,000. Given that retained earnings amounted to $6,000 at the end of Year 2, what was Chavez's net income for Year 2? A) $3,000 B) $5,000 C) $7,000 D) $2,000

C

Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $650 of revenues. 4) Paid expenses of $250. 5) Paid a $50 dividend. During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750. 4) Incurred expenses of $360. 5) Paid dividends of $100. The amount of total liabilities on Packard's Year 1 balance sheet is A) $200 B) $340 C) $420 D) $670

A

Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $650 of revenues. 4) Paid expenses of $250. 5) Paid a $50 dividend. During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750. 4) Incurred expenses of $360. 5) Paid dividends of $100. The amount of assets on Packard's Year 2 balance sheet is A) $2,115. B) $440. C) $2,215. D) $395.

C

Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $650 of revenues. 4) Paid expenses of $250. 5) Paid a $50 dividend. During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750. 4) Incurred expenses of $360. 5) Paid dividends of $100. What is Packard Company's net cash flow from financing activities for Year 2? A) $220 outflow B) $320 outflow C) $5 inflow D) $225 inflow

D

Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $650 of revenues. 4) Paid expenses of $250. 5) Paid a $50 dividend. During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750. 4) Incurred expenses of $360. 5) Paid dividends of $100. What is the amount of total stockholders' equity that will be reported on Packard's balance sheet at the end of Year 1? A) $1,350 B) $900 C) $250 D) $1,300

A

Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $650 of revenues. 4) Paid expenses of $250. 5) Paid a $50 dividend. During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750. 4) Incurred expenses of $360. 5) Paid dividends of $100. What is the net cash inflow from operating activities that will be reported on Packard's statement of cash flows for Year 1? A) $400 B) $650 C) $350 D) $820

D NA NA D

Perez Co. paid $220,000 cash for salaries expense. Assets = Liabilities + Common Stock + Retained Earnings

C

Perez Company paid a $300 cash dividend. Which of the following accurately reflects how this event affects the company's financial statements? Assets = Liabilities + Common Stock +Retained Earnings A. 300 = 300 + NA + NA B. (300) = NA + (300) + NA C. (300) = NA + NA + (300) D. 300 = NA + NA + 300

NA NA NA NA

Pierce Co. paid $40,000 cash to purchase land. Assets = Liabilities + Common Stock + Retained Earnings

B

Retained earnings at the beginning and ending of the accounting period were $300 and $800, respectively. Revenues of $1,100 and dividends paid to stockholders of $200 were reported during the period. What was the amount of expenses reported for the period? A) $500 B) $400 C) $900 D) $700

B

Reynolds Company experienced an accounting event that affected its financial statements as indicated below: Assets=Liabilities+Stockholders' Equity + = NA + + _______________________________________________________ Which of the following accounting events could have caused these effects on Reynolds' accounting equation? A) Paid a cash dividend. B) Earned cash revenue. C) Borrowed money from a bank. D) The information provided does not represent a completed event.

D

Robertson Company paid $1,850 cash for rent expense. What happened as a result of this business event? A) Total equity decreased. B) Liabilities decreased. C) The net cash flow from operating activities decreased. D) Both total equity and net cash flow for operating activities decreased.

D

Santa Fe Company was started on January 1, Year 1, when it acquired $9,000 cash by issuing common stock. During Year 1, the company earned cash revenues of $4,500, paid cash expenses of $3,750, and paid a cash dividend of $250. Which of the following is true based on this information? A) The December 31, Year 1 balance sheet would show total equity of $8,750. B) The Year 1 income statement would show net income of $500. C) The Year 1 statement of cash flows would show net cash inflow from operating activities of $4,500. D) The Year 1 statement of cash flows would show a net cash inflow from financing activities of $8,750.

B

Stosch Company's balance sheet reported assets of $40,000, liabilities of $15,000 and common stock of $12,000 as of December 31, Year 1. Retained earnings on the December 31, Year 2 balance sheet is $18,000 and Stosch paid a $14,000 dividend during Year 2. What is the amount of net income for Year 2? A) $17,000 B) $19,000 C) $13,000 D) $21,000

D

Tandem Company borrowed $32,000 of cash from a local bank. Which of the following choices accurately reflects how this event affects the accounting equation? Asset=Liabilities+Common Stock+ Retained Earnings A. NA = 32,000 + NA + 32,000 B. 32,000 = NA + 32,000 + NA C. 32,000 = NA + NA + 32,000 D. 32,000 = 32,000 + NA + NA A) Option A B) Option B C) Option C D) Option D

C

The financial statements of Calloway Company prepared at the end of the current year contained the following elements and corresponding amounts: Assets = $50,000; Liabilities = ?; Common Stock = $15,000; Revenue = $22,000; Dividends = $1,500; Beginning Retained Earnings = $3,500; Ending Retained Earnings = $7,500. Based on this information, what was the amount of expenses reported on Calloway's income statement for the current year? A) $18,500 B) $13,000 C) $16,500 D) $10,000

A

The financial statements of Calloway Company prepared at the end of the current year contained the following elements and corresponding amounts: Assets = $50,000; Liabilities = ?; Common Stock = $15,000; Revenue = $22,000; Dividends = $1,500; Beginning Retained Earnings = $3,500; Ending Retained Earnings = $7,500. What was the amount of total liabilities reported on the balance sheet as of the end of the current year? A) $27,500 B) $31,500 C) $35,000 D) $42,500

A

The statement of changes in stockholders' equity presents A) an explanation of the changes in the beginning and ending balances of stockholders' equity. B) a comparison of the benefits and the sacrifices a company experiences from its operations. C) information in three categories including operating, investing, and financing activities. D) a list of a company's assets and the sources of those assets.

D

Turner Company reported assets of $20,000 (including cash of $9,000), liabilities of $8,000, common stock of $7,000, and retained earnings of $5,000. Based on this information, what can be concluded? A) 25% of Turner's assets are the result of prior earnings. B) $5,000 is the maximum dividend that can be paid to shareholders. C) 40% of Turner's assets are the result of borrowing from creditors. D) 25% of Turner's assets are from prior earnings, $5,000 is the maximum possible dividend, and 40% of assets are the result of borrowed resources.

I NA I NA

Walker Co. issued common stock for $150,000 cash. Assets = Liabilities + Common Stock + Retained Earnings

A

What does negative retained earnings indicate? A) The company has lost some or all of the owners' investment B) The company experienced a large cash outflow during the year C) The company's liabilities are greater than its assets D) The company's common stock is negative

assets, liabilities, owner's equity

What financial statement elements are reported on a balance sheet?

Stakeholders are the parties that are interested in operations of an organization.

What is meant by the term "stakeholders"?

C

What is the process of dividing up assets and allocating them to resource providers (creditors and investors)? A) Equity distribution B) Stock repayment C) Liquidation D) Utilization

B

When a business provides services for cash, which elements of the accounting equation are affected? A) Revenue and Expense B) Cash and Revenue C) Cash and Expense D) Cash and Dividends

C

Which financial statement matches asset increases from operating a business with asset decreases from operating the business? A) Balance sheet B) Statement of changes in equity C) Income statement D) Statement of cash flows

Income Statement

Which financial statement reports revenue and expenses?

E

Which of the financial statements are required by the Generally Accepted Accounting Principles (GAAP)? A) Income Statement B) Statement of Changes in stockholders' equity C) Statement of Cash Flows D) Balance Sheet E) All of these financial statements are required by GAAP

D

Which of the following appears in the investing activities section of the statement of cash flows? A) Cash inflow from interest revenue B) Cash inflow from the issuance of common stock C) Cash outflow for the payment of dividends D) Cash outflow for the purchase of land

C

Which of the following cash transactions would not affect total assets? A) Borrowing cash from a bank B) Issuing common stock for cash C) Purchasing land for cash D) Providing services for cash

A

Which of the following could describe the effects of an asset exchange transaction on a company's total assets, total liabilities and total equity? Assets = Liab. + Equity A. NA = NA + NA B. + = NA + + C. − = NA + − D. NA = NA + + −

A

Which of the following could represent the effects of an asset source transaction on the accounting equation? Assets=Liabilities+Stockholders' Equity A. + = + + NA B. − = NA + − C. +− = NA + NA D. NA = + + −

B

Which of the following describes the effects of an asset use transaction on the accounting equation? Assets = Liab. + Equity A. + = + + NA B. − = NA + − C. + − = NA + NA D. NA = + + NA

D

Which of the following groups has the primary responsibility for establishing generally accepted accounting principles for business entities in the United States? A) Securities and Exchange Commission B) U.S. Congress C) International Accounting Standards Board D) Financial Accounting Standards Board

C

Which of the following is an example of revenue? A) Cash received as a result of a bank loan B) Cash received from investors from the sale of common stock C) Cash received from customers at the time services were provided D) Cash received from the sale of land for its original selling price

D

Which of the following is not an element of the financial statements? A) Net income B) Revenue C) Assets D) Cash

D

Which of the following is not an example of an asset use transaction? A) Paying cash dividends B) Paying cash expenses C) Paying off the principal of a loan D) Paying cash to purchase land

A

Which of the following statements is false regarding managerial accounting information? A) It is often used by investors. B) It is more detailed than financial accounting information. C) It can include nonfinancial information. D) It focuses on divisional rather than overall profitability.

D

Which of the following would be reported in the cash flow from financing activities section of a statement of cash flows? A) Paid cash for dividends B) Received cash for common stock C) Sold land for cash D) Paying cash for dividends and receiving cash from common stock

D

Which of the following would not describe the effects of an asset source transaction on the accounting equation? A. + = + + NA + NA B. + = NA + NA + + C. + = NA + + + NA D. +− = NA + NA + NA

B

Which resource providers lend financial resources to a business with the expectation of repayment with interest? A) Consumers B) Creditors C) Investors D) Owners

D

Which type of accounting information is intended to satisfy the needs of external users of accounting information? A) Cost accounting B) Managerial accounting C) Tax accounting D) Financial accounting

Markets include consumers, conversion agents, and resource owners.

Who are the three distinct types of participants in the market for business resources?

D

Yi Company provided services to a customer for $5,500 cash. Based on this information alone, which of the following statements is true? A) Total assets increased and total equity decreased. B) Total assets were unchanged. C) Liabilities decreased and net income increased. D) Total assets increased and net income increased

B

Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions: 1) issued stock for $40,000 2) borrowed $25,000 from its bank 3) provided consulting services for $39,000 4) paid back $15,000 of the bank loan 5) paid rent expense for $9,000 6) purchased equipment costing $12,000 7) paid $3,000 dividends to stockholders 8) paid employees' salaries for work completed during the year, $21,000 66) What is Yowell's net cash flow from operating activities? A) Inflow of $6,000 B) Inflow of $9,000 C) Inflow of $18,000 D) Inflow of $30,000

D

Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions: 1) issued stock for $40,000 2) borrowed $25,000 from its bank 3) provided consulting services for $39,000 4) paid back $15,000 of the bank loan 5) paid rent expense for $9,000 6) purchased equipment costing $12,000 7) paid $3,000 dividends to stockholders 8) paid employees' salaries for work completed during the year, $21,000 What is Yowell's ending notes payable balance? A) $0 B) $25,000 C) ($15,000) D) $10,000

A

Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions: 1) issued stock for $40,000 2) borrowed $25,000 from its bank 3) provided consulting services for $39,000 4) paid back $15,000 of the bank loan 5) paid rent expense for $9,000 6) purchased equipment costing $12,000 7) paid $3,000 dividends to stockholders 8) paid employees' salaries for work completed during the year, $21,000 What is Yowell's net income? A) $9,000 B) $30,000 C) $18,000 D) $6,000