Accounting Exit - Exam Question And Solutions Wit...

Total existing capital = $80,000 C contributes $40,000 → Total new capital = $120,000 C’s 25% of $120,000 = $30,000 (credited to C) Bonus to old partners = $40,000 – $30,000 = $10,000

Answer: b) Jan 20 Under accrual accounting, revenue is recognized when control of goods transfers to the buyer (delivery date = Jan 20), not when cash is received or contract signed. Question 2 (Cost Accounting – Break-even Point) Selling price per unit = $50 Variable cost per unit = $30 Total fixed costs = $20,000 What is the break-even point in units? a) 400 b) 500 c) 1,000 d) 667 Accounting Exit Exam Question and Solutions wit...

Taxable income = Gross income ($500,000) – Deductions ($300,000) = $200,000 (Tax-exempt income is ignored for taxable income.) Tax due = $200,000 × 25% = $50,000 Question 10 (Cash Flow Statement – Indirect Method) Net income = $80,000 Depreciation = $10,000 Increase in AR = $5,000 Decrease in AP = $3,000 Total existing capital = $80,000 C contributes $40,000