40 Apple opened Apple Photographhy, Inc. on January 1 of the current year. Durin

Question

40 Apple opened Apple Photographhy, Inc. on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books: 1 Andrea, the stockcholder, Invested $14,100 cash in the business. 2. Andrea contributed $26,000 of photography equipment to the business. 3. The company paid $2,700 cash for an insurance policy covering the next 24 months 4. The company received $6,300 cash for services provided during January 5. The company purchased $6,800 of office equipment on credit 6. The company provided $3,350 of services to customers on account 7. The company paid cash of $2100 for monthly rent. 8. The company pald $3,700 on the office equipment purchased in transaction #5 above. 9. Paid $335 cash for January utilities Based on this Information, the balance in the stockholders' equity reported on the Balance Sheet at the end of the month would be O $39.800 $47,315 O $36,815 O $46,400 $38.350

Explanation / Answer

Solution 40:

Total captial invested = $14,100 + $26,000 = $40,100

Profit for the month = Revenue - Expenses = ($6,300 + $3,350) - [$2,100 (Rent) + $335 (Utilities)

= $7,215

Stockholder equity to be reported at the end of month = $40,100 + $7,215 = $47,315

Hence 2nd option is correct.

Solution 41:

Net income = Service revenue - Rent expense - Utilities expesnes - salaries expense

= $258,000 - $32,000 - $19,000 - $45,000 = $162,000

Hence 3rd option is correct.

Solution 42:

Cost of goods sold = Sales - Gross Profit = $382,200 - $160,700 = $221,500

Hence first option is correct.

Solution 43:

Hence last option is correct.

Journal Entries Particulars Debit Credit Accounts receivables Dr $7,600.00        To Sales Revenue $7,600.00

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