Hal Smith Opened Smith's Repairs on March 1 of the Current

question 53

Multiple Choice

Hal Smith opened Smith's Repairs on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books: 1. Smith invested $25,000 cash in the business.
2) Smith contributed $100,000 of equipment to the business.
3) The company paid $2,000 cash to rent office space for the month.
4) The company received $16,000 cash for repair services provided during March.
5) The company paid $6,200 for salaries for the month.
6) The company provided $3,000 of services to customers on account.
7) The company paid cash of $500 for monthly utilities.
8) The company received $3,100 cash in advance of providing repair services to a customer.
9) Smith withdrew $5,000 for his personal use from the company.
Based on this information, net income for March would be:

• A) $10,300.
• B) $13,400.
• C) $5,300.
• D) $8,400.
• E) $13,500.

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Definitions:

Substitution Effect

The Substitution Effect refers to changes in consumption patterns due to a change in the relative prices of goods, leading consumers to replace more expensive items with less costly alternatives.

Tea

A beverage made by steeping processed leaves, buds, or twigs of the tea plant in hot water, enjoyed globally for its aromatic flavors.

Coffee

A brewed drink prepared from roasted coffee beans, which are the seeds of berries from the Coffea plant.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers.