Given the Data Below for a Firm in Its First

question 7

Multiple Choice

Given the data below for a firm in its first year of operation determine net income under the accrual basis of accounting. $\begin{array} { l r } \text { Revenue recognized } & \$ 19,000 \\\text { Accounts receivable } & 3,000 \\\text { Expenses incurred } & 7,250 \\\text { Accounts payable (related to expenses) } & 750 \\\text { Supplies purchased with cash } & 1,800\end{array}$

• A)$11750
• B)$14000
• C)$9500
• D)$12200

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Definitions:

Cost of Goods Manufactured

The total production cost of goods completed and moved to finished goods inventory within a specific period, including materials, labor, and overhead.

Factory Overhead

The indirect manufacturing costs that are not directly tied to the production of goods, such as maintenance, utilities, and salaries for support staff.

Depreciation

Depreciation is the accounting method of spreading out the cost of a tangible asset over its useful life, recognizing the asset's gradual loss of value over time.

Worker's Tools

Equipment and tools that are required and used by a worker to perform their job.