Following Is a List of Account Balances of Wilson Mowing

question 13

Multiple Choice

Following is a list of account balances of Wilson Mowing Service as at 31 December of the first year of operation: $$\begin{array} { | l | l | } \hline \text { Accounts receivable } & \$ 4000 \\\hline \text { Accounts payable } & 5000 \\\hline \text { Salary expense } & 5000 \\\hline \text { Repairs expense } & 500 \\\hline \text { Truck } & 12,000 \\\hline \text { Equipment } & 10,000 \\\hline \text { Loans payable } & 24,800 \\\hline \text { Cash } & 12,000 \\\hline \text { Supplies expense } & 10,000 \\\hline \text { Service revenue } & 24,800 \\\hline \text { Petrol expense } & 7200 \\\hline \text { Salary payable } & 1200 \\\hline\end{array}$$ Calculate the profit.

• A)$2000
• B)$2900
• C)$30,300
• D)$33,200

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Definitions:

Capital Lease

A lease classified as an asset purchase for accounting purposes, where the lessee assumes some of the risks and benefits of ownership.

Lease Term

The period during which a lessee has the right to use an asset, as stipulated in a lease agreement.

Economic Life

The estimated period over which an asset is expected to be economically useful to one or more users.

Present Value

Present Value is the current worth of a future sum of money or stream of cash flows given a specified rate of return, reflecting the time value of money.