Toby Toy Store Has Noticed the Following Items That Need

question 83

Multiple Choice

Toby Toy Store has noticed the following items that need to be considered for its income statement for the year ended December 31,2019: • Commissions of $3,000 for salespeople who made sales in December will be paid January 3,2020.
• The phone bill of $400 for December was received and will be paid January 20,2020.
• The store rent of $2,000 for January 2020 was paid on December 28,2019.
• At the beginning of November,Toby paid $1,500 for advertising in a monthly magazine that is distributed in November and December of 2019,and January of 2020.
What is the proper amount of expenses to be included in the income statement for the year?

• A)$4,400.
• B)$6,900.
• C)$6,400.
• D)$5,900.

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Definitions:

Amortization of Bond Premium

The process of gradually writing off the premium paid over the par value of a bond over its life.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues.

FASB

The Financial Accounting Standards Board, an independent organization responsible for establishing and improving financial accounting and reporting standards in the United States.

Simultaneous Financing

The process of arranging for multiple sources of finance at the same time, often for complex deals or projects.