Answer the Next Questions Using the Following Annual Income Statement

question 5

Multiple Choice

Answer the next questions using the following annual income statement for Bonus Realty, Inc.:

$\begin{array}{c}\begin{array}{lll} \text { Revenues}\\ \text { Revenue from sales of goods and services}\\ \text { Operating costs and expenses:}\\ \text { Cost of products and services sold}\\ \text { Selling expenses}\\ \text { Administrative expense}\\ \text { Total operating costs and expenses}\\ \text { Income from operations}\\ \text { Interest expense (corporate bonds \& loans) }\\ \text { Non-recurring expense (Legal expenses/fines in}\\ \text { settling a federal antitrust suit) }\\ \text { Income taxes.}\\ \text { Net income}\\ \end{array}\begin{array}{r}\\\$ 100,000,000 \\\\\$ 30,000,000 \\\$ 3,000,000 \\\underline{\$ 4,000,000} \\\underline{ \$ 37,000,000} \\\$ 63,000,000 \\\$ 500,000 \\\\\$ 100,000 \\\underline{\$ 740,000} \\\underline{\underline{\$ 61,660,000 }}\\ \end{array}\end{array}$

During this year of operation, Bonus Realty owned and occupied an office building in downtown Cleveland. For this year, the building could have been leased to other businesses for $3,000,000 in lease income. Bonus Realty also owned undeveloped land valued at $10,000,000. Owners of Bonus Realty can earn a 4% rate of return annually on funds invested elsewhere.
-Total explicit costs of using market-supplied resources for Bonus Realty for this year are

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Definitions:

Internal Controls

Strategies and protocols a corporation uses to safeguard the reliability of their financial and accounting data, encourage responsibility, and avert theft.

Financial Information

Data relating to the financial performance, position, and cash flows of a business, used by stakeholders to make informed decisions.

Misstatement

An error or inaccuracy in financial records or statements, often resulting due to oversight or misunderstanding.

Cash Management

The process of collecting, managing, and investing a company's cash in a way that optimizes its liquidity, investment return, and risk levels.