Useful Organizing Began Operations on January 1,20X3,when the Owners Invested

question 29

Multiple Choice

Useful Organizing began operations on January 1,20X3,when the owners invested $80,000 cash in the company.Also on January 1,the company paid for a $30,000 machine.The machine has a useful life of 4 years and a $2,000 residual value.During its first year of operations,the company had sales of $96,000 and operating expenses except depreciation of $67,000.All sales were cash sales and all non-depreciation operating expenses were paid in cash.Useful Organizing has a 30% tax rate and pays all taxes on December 31.What is the cash balance before taxes on December 31,20X3,if Useful Organizing uses double-declining- balance depreciation?

• A)$64,000
• B)$74,500
• C)$79,000
• D)$83,500
• E)$94,000

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Definitions:

Bankruptcy Process

A legal proceeding involving a person or business that is unable to repay their outstanding debts, which allows for the liquidation or reorganization of assets.

Higher-income People

Individuals or households that earn a significantly above-average level of income compared to the general population.

Chapter 7 Bankruptcy

involves the liquidation of a debtor's non-exempt assets by a trustee to pay creditors, part of the U.S. Bankruptcy Code.

Chapter 13

refers to a part of the U.S. Bankruptcy Code that enables individuals with a regular income to develop a plan to repay all or part of their debts.