During 2020, Wu Han Co

question 17

Multiple Choice

During 2020, Wu Han Co. generated nest sales of $95,000. The company's expenses were as follows: cost of goods sold of $47,000, operating expenses of $16,000 and a loss on disposal of plant assets of $5,000. Wu Han's net income is

• A) $27,000.
• B) $32,000.
• C) $48,000.
• D) $95,000.

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Definitions:

Installment Note

A debt instrument that requires the borrower to make regular payments (installments) of principal and interest over a set period until the total debt is paid.

Journal Entry

A record in the books of accounts that represents a transaction and its effect on various accounts.

Interest Expense

The financial charge for an entity using borrowed capital over a time frame.

Notes Payable

Short-term or long-term liabilities representing amounts owed on written promises to pay a specific sum of money at a future date.