Compute Net Income for May Based on the Following Transactions

question 81

Multiple Choice

Compute net income for May based on the following transactions: May 14 Paid $1,200 for two weeks wages.
May 15 Performed $5,200 in consulting services on account.
May 17 Billed a customer $1,500 for services performed May 16.
May 20 Received $5,200 in payment for May 15 transaction.
May 22 Performed services and immediately collected $2,000.
May 31 Paid $500 for advertising in the local paper to take place in June.

• A)$10,200
• B)$ 5,300
• C)$ 8,700
• D)$13,900
• E)$ 7,000

Comprehend the labor-leisure choice framework and the effects of income and substitution on labor supply.

Recognize how equilibrium wage is determined in perfectly competitive labor markets.

Understand the role of human capital in determining wage disparities.

Analyze how changes in product demand affect a firm’s labor demand.

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Definitions:

Option Price

The price that the option buyer pays to the option seller (writer) for the rights conveyed by the option contract.

Warrants

Securities that grant the holder the right to purchase the company's stock at a predetermined price before a specified date.

Implicit Call Option

A feature embedded in certain financial instruments or contracts that gives the issuer the right, but not the obligation, to take some action under specified conditions.

Loan Guarantees

Agreements in which a third party (the guarantor) agrees to repay the debt or perform an obligation if the debtor defaults.