The Following Data Relate to Rocket Company for the Year

question 86

Multiple Choice

The following data relate to Rocket Company for the year ended December 31, 2012.Rocket Company uses the cash basis. $$\begin{array} { l r } \text { Sales on credit } & \$ 180,000 \\\text { Cost of inventory sold on credit } & 130,000 \\\text { Collections from customers } & 170,000 \\\text { Purchase of inventory on credit } & 140,000 \\\text { Payment for purchases } & 150,000 \\\text { Selling expenses (accrual basis) } & 20,000 \\\text { Payment for selling expenses } & 25,000\end{array}$$ Which of the following amounts represents income for Rocket Company for the year ended December 31, 2012?

• A)$30,000
• B)$5,000 loss
• C)$40,000
• D)$45,000
• E)$50,000

---

Definitions:

Competitive Strategy

A plan of action designed to achieve a sustainable advantage over competitors, through understanding and responding to competitive forces.

Contingency Strategy

A plan prepared to address specific unforeseen events or situations that may impact the organization.

Marketing Strategy

A plan of action designed to promote and sell a product or service.

Tactical Strategy

Short-term focused actions and plans developed to achieve specific parts of a larger strategic goal.