Practice Questions - Chapter 3(1).docx - Practice Questions...

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Practice Questions – Principles of Accounting IThe following is selected information from Monty Corporation for the fiscal year ending October31, 2020.Cash received from customers$300,000Revenue recognized378,000Cash paid for expenses180,000Cash paid for computers on November 1, 2019 that will be usedfor 3 years (annual depreciation is $15,000)45,000Expenses incurred, including interest, but excluding any depreciation230,000Proceeds from a bank loan, part of which was used to pay forthe computers100,000Based on the accrual basis of accounting, what is Monty Corporation’s net income forthe year ending October 31, 2020?a.$75,000.b.$105,000.c.$133,000.d.$148,000.
Toole Company had the following transactions during 2020:Sales of $4,200 on accountCollected $2,500 for services to be performed in 2021Paid $1,580 cash in salariesPurchased airline tickets for $350 in December for a trip to take place in 2021What is Toole’s 2020 net income using accrual accounting?

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Term
Fall
Professor
DIANAROBINSON
Tags
Accounting, Depreciation, Fiscal Year, Revenue, Prepaid rent, Generally Accepted Accounting Principles

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