Jodie's Bakery Generates a Yearly Revenue of $6000

question 108

Multiple Choice

Jodie's Bakery generates a yearly revenue of $6000.Throughout the year Jodie spends $1500 on flour,$1000 on fruit,$500 on sugar & spices,$1500 on butter,and employs an assistant whom she pays $1000.Calculate the value of the annual output produced by Jodie's Bakery using the value added method.

• A)$1000
• B)$1500
• C)$4500
• D)$5000
• E)$6000

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Definitions:

Income Summary

An account used in the closing process that summarizes the results of operations by collecting all revenue and expense account balances before determining the net income or loss.

Retained Earnings

The cumulative amount of profits that have been reinvested in the business rather than distributed to shareholders as dividends.

Dividends

Dividends disbursed to members holding shares in a corporation, generally originating from the profits of the business.

Salary Expense Accrual

An accounting practice of recognizing salary expenses incurred in a period that has not yet been paid out in order to accurately reflect the company's liabilities.