At the End of Its First Month of Operations, Michael's

question 179

Multiple Choice

At the end of its first month of operations, Michael's Consulting Services reported net income of $25,000. They also had account balances of:
Cash, $18,000; Office Supplies, $2,000 and Accounts Receivable $10,000. The owner's total investment for this first month was $5,000. There were no owner withdrawals in the first month.
Calculate the ending balance in the Owner's Capital account to be reported on the Statement of Owner's Equity.

• A) $20,000
• B) $7,000
• C) $30,000
• D) $5,000
• E) $25,000

Analyze the challenges of population expansion and capital flight in DVCs.

Understand the advantages of infrastructure development in the early stages of economic development.

Recognize the vicious cycle of poverty and how it hampers economic growth in DVCs.

Understand the importance of institutional changes, like land reform, in the economic development of developing nations.

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Definitions:

MC (Marginal Cost)

Expenses incurred from making one more unit of a product or service.

Break-Even

The point at which total costs and total revenue are equal, meaning there is no net loss or gain, and the business or investment is self-sustaining.

Maximize Profits

A strategy or goal where a firm or individual seeks to achieve the highest possible profit from its operations.

Peak Efficiency

The state of operation in which a system or process achieves its maximum output with the lowest input, often ideal in terms of productivity.