Use the Following Information About Q Corporation, an Apartment Rental

question 17

Multiple Choice

Use the following information about Q Corporation, an apartment rental company with three shareholders. $\begin{array}{lr}\text { Interest income }&\$15,000\\\text { Gross rental income }&16,000\\\text { Depreciation, property taxes, and interest expense related to rental }\\\text { income } & 18,000 \\\text { Maintenance and utilities related to rental income } & 4,000 \\\text { Dividends paid during the current year } & 7,000\end{array}$ What is the adjusted ordinary gross income for Q Corporation?

• A)$13,000
• B)$9,000
• C)$(6,000)
• D)$15,000
• E)$31,000

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Definitions:

Asset Turnover

Asset turnover is a financial ratio that measures the efficiency of a company in using its assets to generate sales or revenue.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, representing the wear and tear or obsolescence of the asset.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was put into use, reducing its book value on the balance sheet.

Asset Turnover

A financial ratio that measures how efficiently a company uses its assets to generate sales, calculated by dividing total revenues by average assets.