Sharon Company Reported the Following Transactions for September, 2015

question 22

Multiple Choice

Sharon Company reported the following transactions for September, 2015.

• A)Sharon started the business with a capital contribution of $25,000 cash. It was credited to Sharon, Capital.
• B)The business purchased office equipment for $11,500 for which $2,500 cash was paid and the balance was put on a note payable.
• C)Paid insurance expense of $1,800 cash.
• D)Paid a utility bill for $900 cash.
• E)Paid $2,000 cash for September rent.
• F)The business had sales of $12,000 in September. Of these sales, 60% were cash sales, and the balance was credit sales.
• G)The business paid $8,000 cash for office furniture.

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Definitions:

Fair Value

Fair value refers to the estimated market value of an asset or liability, reflecting the price at which it could be exchanged between knowledgeable, willing parties in an arm's length transaction.

Equity Method

A financial accounting approach for assessing investments in which an investor has significant influence over an associate, reflecting share in profits or losses.

Selling Price

The amount for which a good or service is sold to the customer.

Unrealized Holding Gain

The increase in value of an asset that has not been sold, hence the gain is not realized as actual profit.