Table 1-2
Following Is a List Showing the Account Balances

question 48

Multiple Choice

Table 1-2
Following is a list showing the account balances of various assets, liabilities, revenues, and expenses for Tim's Landscaping at December 31, 2019, the end of its first year of operations. $\begin{array} { | l | r | } \hline \text { Accounts receivable } & \$ 30,000 \\\hline \text { Accounts payable } & 7,000 \\\hline \text { Salary expense } & 9,000 \\\hline \text { Repairs expense } & 1,600 \\\hline \text { Truck } & 17,000 \\\hline \text { Equipment } & 12,600 \\\hline \text { Notes payable } & 16,400 \\\hline \text { Cash } & 13,600 \\\hline \text { Supplies expense } & 3,200 \\\hline \text { Service revenue } & 25,600 \\\hline \text { Gasoline expense } & 1,600 \\\hline \text { Salary payable } & 4,400 \\\hline\end{array}$ The owner, Tim Brown, invested $45,200 during the year and withdrew $10,000 during the year for personal use.
-Refer to Table 1-2. Total assets at December 31, 2019, were:

• A)$65,400.
• B)$72,400.
• C)$73,200.
• D)$63,200.

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Definitions:

Single Category Average Cost Method

A method for calculating the cost basis of mutual funds, ETFs, or stocks for tax purposes, where all shares are considered to have the same average cost.

Long-term Loss

A loss realized on the sale or exchange of a capital asset held for more than one year.

Gift Tax

A tax on the transfer of assets or money from one person to another without receiving something of equal value in return, in excess of annual and lifetime exemptions.

Section 1231

A tax provision that allows for the preferential tax treatment of gains and losses on the sale or exchange of business property and assets held for more than one year.