ABC Delivery Service Had the Following Transactions in June: Earned

question 112

Multiple Choice

ABC Delivery Service had the following transactions in June: Earned $4 000 cash for services rendered; collected $2 500 from a customer 'on account;' paid out $200 cash for plumbing services; received $3 500 of supplies and promised to pay one month later; paid out $1 000 in cash drawings to the owner. How much was Profit in June?

• A)$6 300
• B)$5 300
• C)$3 800
• D)$2 800

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Definitions:

Proprietorship

A form of business organization owned by a single individual who is responsible for its debts and entitled to its profits.

Personal Tax Rate

The percentage at which an individual's income is taxed by the government.

Limited Liability

A legal structure that limits the financial liability of company owners to the amount they have invested in the company.

Debt Instrument

A paper or electronic obligation that enables the issuing party to raise funds by promising to repay a lender in accordance with terms of a contract.