During August 2022, Baxter's Supply Store Generated Revenues of $60,000

question 162

Multiple Choice

During August 2022, Baxter's Supply Store generated revenues of $60,000.The company's expenses were as follows: cost of goods sold of $36,000 and operating expenses of $4,000.The company also had rent revenue of $1,000 and a gain on the sale of a delivery truck of $2,000. Baxter's net income for August 2022 is

• A)$20,000.
• B)$21,000.
• C)$23,000.
• D)$24,000.

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Definitions:

Dividend Yield

The ratio of a company's annual dividends paid to its share price, expressed as a percentage.

Valuation Allowance

A reserve created by a company to offset a portion of the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Business Combination

A business making an investment in another business by acquiring a controlling share, often greater than 50%, of the outstanding voting stock of another corporation by paying cash or exchanging stock.

Accrued Interest

Interest that has been incurred but not yet paid, reflecting the cost of borrowing or the earnings from lending money over a specific period.