Zed Bennett Opened an Art Gallery and as a Dealer

question 102

Multiple Choice

Zed Bennett opened an art gallery and as a dealer completed these transactions:
1) Started the gallery,Artery,by investing $40,000 cash and equipment valued at $18,000.
2) Purchased $70 of office supplies on credit.
3) Paid $1,200 cash for the receptionist's salary.
4) Sold a painting for an artist and collected a $4,500 cash commission on the sale.
5) Completed an art appraisal and billed the client $200.
What was the balance of the cash account after these transactions were posted?

• A)$12,230.
• B)$12,430.
• C)$43,300.
• D)$43,430.
• E)$61,430.

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Definitions:

Estimated Useful Life

The period over which a depreciable asset is expected to be used by an organization, influencing the depreciation method applied.

Equipment Account

An account on a company's balance sheet that reports the value of the company's ownership in equipment, adjusted for depreciation.

Non-Controlling Interest

A shareholder or equity interest in a corporation that is not large or significant enough to confer control over the business.

Entity Method

An accounting approach used in preparing consolidated financial statements where investments in subsidiaries are recorded at cost and adjusted for the parent company's share of the subsidiaries' post-acquisition profits or losses.