Larry Bar Opened a Frame Shop and Completed These Transactions

question 64

Multiple Choice

Larry Bar opened a frame shop and completed these transactions: 1.Larry started the shop by investing $40,000 cash and equipment valued at $18,000 in exchange for common stock.
2.Purchased $70 of office supplies on credit.
3.Paid $1,200 cash for the receptionist's salary.
4.Sold a custom frame service and collected $1,500 cash on the sale.
5.Completed framing services and billed the client $200.
What was the balance of the cash account after these transactions were posted?

• A)$300.
• B)$41,500.
• C)$40,300.
• D)$38,500.
• E)$38,700.

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Definitions:

Fixed Cost

Expenses that do not change with the level of goods or services produced over a short period, such as rent or salaries.

Attractive Location

A site or place deemed desirable for setting up businesses or operations due to factors such as low costs, strategic position, or access to resources.

Fixed Cost

Expenses that do not change with the level of goods or services produced, such as rent, salaries, or loan payments.

Variable Cost

Costs that vary directly with the level of production or service activity, such as materials or labor costs.