La Paz Company Engaged in the Following Transactions During 2012

question 37

Multiple Choice

La Paz Company engaged in the following transactions during 2012, its first year in operation: (Assume all transactions are cash transactions)
1) Acquired $3,000 cash from issuing common stock.
2) Borrowed $2,200 from a bank.
3) Earned $3,100 of revenues.
4) Incurred $2,400 in expenses.
5) Paid dividends of $400.
La Paz Company engaged in the following transactions during 2013:
1) Acquired an additional $500 cash from the issue of common stock.
2) Repaid $1,300 of its debt to the bank.
3) Earned revenues, $4,500.
4) Incurred expenses of $2,750.
5) Paid dividends of $640.
The amount of total assets on La Paz's 2012 balance sheet was

• A) $6,000.
• B) $5,500.
• C) $800.
• D) $3,800.

---

Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected amount, which can impact the cost of goods sold.

Material J

Material J refers to a specific category or type of raw material or input identified with the letter "J" used in manufacturing or production processes.

Direct Materials Quantity Variance

The difference between the budgeted amount of materials needed for production and the actual amount used, valuated at the standard cost.

Labor Rate Variance

The difference between the actual labor costs incurred and the expected or standard labor costs for the production volume achieved.