Finch Company Began Its Operations on March 31 of the Current

question 187

Multiple Choice

Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: *Of the manufacturing costs, three-fourths is paid for in the month they are incurred; one-fourth is paid in the
following month.**Insurance expense is $1,000 a month; however, the insurance is paid four times yearly in the first month of the
quarter (i.e., January, April, July, and October) .***Property tax is paid once a year in November.​
-The cash payments expected for Finch Company in the month of April are

• A)$122,600
• B)$120,600
• C)$123,100
• D)$121,100

Recognize the accounting treatment for sales returns, allowances, and discounts.

Comprehend the significance and calculation of gross profit in merchandising operations.

Differentiate between operating and nonoperating activities for a merchandising company.

Identify the characteristics and differences in the accounting cycle for merchandising and service companies.

---

Definitions:

Wrongful Dissociation

In a partnership or company context, the improper withdrawal or separation of a partner or member contrary to the terms of the agreement.

Legal Existence

The state of being recognized as a juridical entity under the law, capable of rights and obligations.

Senior Partner

The most experienced or highest-ranking partner in a partnership or law firm.

Management Decisions

Choices or judgments made by the management of an organization regarding its operations, strategic direction, and allocation of resources.