Toole Company Had the Following Transactions During 2016 $\bullet$ Sales of $4200 on Account

question 186

Multiple Choice

Toole Company had the following transactions during 2016:
$\bullet$ Sales of $4200 on account
$\bullet$ Collected $2600 for services to be performed in 2017
$\bullet$ Paid $1630 cash in salaries
$\bullet$ Purchased airline tickets for $450 in December for a trip to take place in 2017
What is Toole's 2016 net income using cash basis accounting?

• A) $520.
• B) $970.
• C) $4720.
• D) $5170.

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Definitions:

Consolidated Balance Sheet

A financial statement showing the total assets, liabilities, and equity of a parent company and its subsidiaries as if they were a single entity.

Fair Value Enterprise Method

A valuation technique that estimates the price at which an asset or liability would be exchanged in an orderly transaction between market participants at the measurement date.

Consolidated Balance Sheet

A financial statement that summarizes the assets, liabilities, and equity of a company and its subsidiaries as a single entity.

Negative Acquisition Differential

A situation where the fair value of net assets acquired in a business combination exceeds the purchase consideration, often leading to a bargain purchase gain.