Net Income for Trent Company for 2011 Includes the Effect

question 44

Multiple Choice

Net income for Trent Company for 2011 includes the effect of the following transactions involving the sale of fixed assets:

Purchases of fixed assets during 2011 amounted to $340,000. The Accumulated Depreciation account increased $40,000 during 2011. How much was depreciation expense for 2011?

• A) $217,000
• B) $270,000
• C) $40,000
• D) $32,000

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Definitions:

Income

Money received, especially on a regular basis, for work or through investments.

Total Tax

The aggregate amount of tax owed to federal, state, local, and foreign taxing authorities.

Cash Flow

The broad sum of financial activities entering and exiting a business, influencing its ability to maintain liquid assets.

Stockholders

Individuals or institutions that own shares in a corporation, giving them ownership rights and potential financial benefits.