The Following Items Are Taken from the Financial Statements of the Freight

question 89

Multiple Choice

The following items are taken from the financial statements of the Freight Service for the year ending December 31 2016: $\begin{array}{lr}\text { Accounts payable } & \$ 19,000 \\\text { Accounts receivable } & 13,000 \\\text { Accumulated depreciation - equipment } & 26,000 \\\text { Advertising expense } & 21,200 \\\text { Cash } & 15,000 \\\text { Owner's capital (1/1/16) } & 104,000 \\\text { Owner's drawings } & 11,000 \\\text { Depreciation expense } & 12,000 \\\text { Insurance expense } & 3,800\\\text { Note payable, due } 6 / 30 / 17 & 72,000 \\\text { Prepaid insurance (12-month policy) } & 7,200 \\\text { Rent expense } & 16,000 \\\text { Salaries and wages expense } & 32,000 \\\text { Service revenue } & 135,000 \\\text { Supplies } & 5,000 \\\text { Supplies expense } & 6,000 \\\text { Equipment } & 210,000\end{array}$ What are total long-term liabilities at December 31 2016?

• A) $0
• B) $72000
• C) $91000
• D) $93000

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Definitions:

Marginal Tax Rate

The rate at which the next dollar of taxable income is taxed, indicating the percentage of tax applied to your income for each tax bracket in which you qualify.

Taxable Income

The portion of an individual's or company's income used to determine how much tax is owed to the government.

Government Spending

Expenditures made by the government sector on goods and services, including infrastructure, education, and defense.

Taxes

Essential monetary obligations or assorted forms of taxes imposed on individuals by government organizations, designed to facilitate government budgeting and various public expenditure.