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

question 3

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 current assets at December 31 2016?

• A) $28000
• B) $35200
• C) $40200
• D) $46200

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Definitions:

Shares

Shares represent the portion of ownership in a company or an investment that entitles the holder to a proportional claim on profits, which may be paid out as dividends if declared.

Unissued Stock

Shares that a company is authorized to issue according to its corporate charter but has not yet issued to shareholders.

Outstanding Bonds

Bonds issued by an entity that are currently not redeemed and are in the hands of investors, indicating debt that still needs to be paid off.

Allocation

The process of distributing resources or assigning tasks among various projects, units, or individuals.