Use This Adjusted Trial Balance to Answer the Following Question

question 30

Multiple Choice

Use this adjusted trial balance to answer the following question. $\begin{array}{c} \text { Dan's Marina}\\ \text { Adjusted Trial Balance}\\ \text { December 31, 2010}\\\begin{array}{|l|r|r|}\hline \text { Cash } & \$ 2,500 \\\text { Accounts Receivable } & 3,500 \\\text { Supplies } & 1,500 \\\text { Prepaid Insurance } & 2,500 \\\text { Dock } & 12,000\\\text { Accumulated Depreciation-Dock } & & \$ 3,000 \\\text { Accounts Payable } & & 6,000 \\\text { Common Stock } & & 10,000 \\\text { Dividends } & 4,000 & \\\text { Boat Rentals } & & 17,000\\\text { Depreciation Expense-Dock } & 1,000 & \\\text { Wages Expense } & 6,500 \\\text { Insurance Expense } & 2,000 & \\\text { Income Taxes Expense } & 500 \\& \$ 36,000 & \$ 36,000 \\\hline\end{array}\end{array}$ The entry to close the expense accounts includes a

• A) debit to Retained Earnings for $2,000.
• B) debit to Income Summary for $10,000.
• C) debit to Insurance Expense for $2,000.
• D) credit to Retained Earnings for $10,000.

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Definitions:

Order Quantity

The amount of an item that is ordered from a supplier to replenish inventory or to fulfill customer demand.

Inventory Carrying Cost Rate

The total cost associated with holding inventory over a given period, often expressed as a percentage of the inventory value, including costs related to storage, insurance, taxes, and depreciation.

Reams

A measure of paper quantity, traditionally consisting of 500 sheets of paper.

Order Cost

The total expense incurred in placing and processing an order, including administrative expenses, shipping charges, and any other relevant costs.