At the End of Its First Month of Operations,Michael's Consulting

question 81

Multiple Choice

At the end of its first month of operations,Michael's Consulting Services reported net income of $25,000.They also had account balances of: Cash,$18,000; Office Supplies,$2,000 and Accounts Receivable $10,000.The sole stockholder's total investment in exchange for common stock for this first month was $5,000.There were no dividends in the first month. Calculate the amount of total equity to be reported on the balance sheet at the end of the month.

• A)$30,000
• B)$25,000
• C)$20,000
• D)$5,000
• E)$7,000

---

Definitions:

Tying

A sales practice where a seller requires the purchase of additional goods or services as a condition for buying a given product.

Profit-Maximizing Price

The profit-maximizing price is the price point at which a business can sell its product or service to maximize its profit margin, given its cost structure and market demand.

Narthex

The entrance or lobby area, typically located at the west end of an early Christian or medieval church, used for gathering before services.

Atrium

The central reception room of a Roman domus that is partly open to the sky. Also, the open, colonnaded court in front of and attached to a Christian basilica.