Use the Following for Questions

question 120

Multiple Choice

Use the following for questions
Sanchez Company engaged in the following transactions during 2015:
1) Started the business by issuing $42,000 of common stock for cash.
2) The company paid cash to purchase $26,400 of inventory.
3) The company sold inventory that cost $16,000 for $30,600 cash.
4) Operating expenses incurred and paid during the year,$14,000.
Sanchez Company engaged in the following transactions during 2016:
1) The company paid cash to purchase $35,200 of inventory.
2) The company sold inventory that cost $32,800 for $57,000 cash.
3) Operating expenses incurred and paid during the year,$18,000.
Note: Sanchez uses the perpetual inventory system.
-The amount of retained earnings at December 31,2016 is:

• A)$6,200.
• B)$26,000.
• C)$6,800.
• D)$38,800.

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Definitions:

Insurance Adjustment

The process of examining and deciding the amount to be paid out on a claim by an insurance company.

Remittance Advice Form

A document sent by a customer to a supplier to inform the supplier that their invoice has been paid.

Insurance Payment

The amount paid to an insurer or healthcare provider to cover the cost of an insured individual's medical services or treatment.

Remittance Advice Form

A document sent by a payer to a payee, outlining the details of a payment transaction, often used in medical billing.