Following Is a List of Account Balances (Except for Owner's

question 159

Multiple Choice

Following is a list of account balances (except for owner's capital) of Wilson Mowing Service as of December 31 of the first year of operation: $$\begin{array} { | l | r | } \hline \text { Accounts receivable } & \$ 2,500 \\\hline \text { Accounts payable } & 3,500 \\\hline \text { Salary expense } & 4,500 \\\hline \text { Repairs expense } & 800 \\\hline \text { Truck } & 8,500 \\\hline \text { Equipment } & 6,300 \\\hline \text { Notes payable } & 8,200 \\\hline \text { Cash } & 6,800 \\\hline \text { Supplies expense } & 1,600 \\\hline \text { Service revenue } & 31,900 \\\hline \text { Gasoline expense } & 3,800 \\\hline \text { Salary payable } & 200 \\\hline\end{array}$$
-The proprietor,J.D.Wilson,contributed $3,000 at the beginning of the year; during the year,the proprietor made $12,000 in drawings.
At the end of the year,what is the amount of total owner's equity?

• A) $11,900
• B) $24,100
• C) $21,200
• D) $12,200

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Definitions:

First-In, First-Out

An inventory valuation method where the goods first purchased or produced are the first ones sold, assuming that older inventory is used up first.

Equivalent Units

A concept in cost accounting used to allocate costs to mass-produced items that are not identical, allowing for the calculation of per-unit costs at various stages of production.

Conversion Cost

The total cost of converting raw materials into finished goods, comprising both direct labor costs and manufacturing overhead costs.

Total Conversion Cost

The sum of all labor costs and overhead expenses involved in converting raw materials into finished goods.