Newton Corporation Entered into the Following Transactions During Its First

question 19

Multiple Choice

Newton Corporation entered into the following transactions during its first year of operations. (Assume all transactions involve cash.) Acquired $2,000 of capital from the owners.Purchased $600 of direct raw materials.Used $400 of these direct raw materials in the production process.Paid production workers $800 cash.Paid $400 for manufacturing overhead.Started and completed 200 units of inventory.Sold 50 units at a price of $12 each.Paid $80 for selling and administrative expenses.The amount of net income for the year was:

• A) $100.
• B) $75.
• C) $50.
• D) $120.

---

Definitions:

Cash Balance

The amount of cash that a company, individual, or account has available at any given point in time.

Pre-numbered Documents

Documents that are sequentially numbered ahead of time to help ensure completeness and control over processes like inventory, purchasing, and payroll.

Time Lags

Delays between the initiation of an action and its effect or outcome, often encountered in economic policies or financial transactions.

Errors

Mistakes or inaccuracies in financial information or records, which may require correction through adjustments.