James Company Experienced the Following Events During Its Accounting Period

question 94

Multiple Choice

James Company experienced the following events during its accounting period: (1) Purchased $10,000 of inventory on account.(2) Returned $2,000 of inventory purchased in Event 1.(3) Paid the remaining balance in account payable for the inventory purchased in Event 1.(4) Sold inventory purchased in Event 1 for $10,000 to customers on account. At the end of the first accounting period what would be reported on the Income Statement for net income?

• A)$2,000
• B)$8,000
• C)$10,000
• D)Zero

Determine the budgeted cost of goods manufactured by considering direct materials, direct labor, and factory overhead costs.

Calculate the budgeted sales revenue and assess its impact on financial planning.

Understand the concept of cash flow management including receipts and payments.

Calculate expected cash collections and payments based on sales and expenses forecasts.

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Definitions:

Contributed Capital

The total value of money or assets that shareholders have directly invested in a company.

Sarbanes-Oxley Act

The Sarbanes-Oxley Act is a United States federal law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes.