Question

1/ In its first year of operations Best Corp. had income before tax of $480,000. Best made income tax payments totaling $175,000 during the year and has an income tax rate of 35%. What was Best's net income for the year?

Multiple Choice

• $312,000.

• $168,000.

• $315,000.

• $305,000

2/ Molly's Auto Detailers maintains its records on the cash basis. During 2018, Molly's collected $73,700 from customers and paid $19,700 in expenses. Depreciation expense of $4,600 would have been recorded on the accrual basis. Over the course of the year, accounts receivable increased $5,600, prepaid expenses decreased $1,500, and accrued liabilities decreased $1,300. Molly's accrual basis net income was:

Multiple Choice

• $52,200.

• $44,000.

• $54,800.

• $98,000.

• 3/ On December 31, 2018, the end of Larry's Used Cars' first year of operations, the accounts receivable was $53,300. The company estimates that $1,600 of the year-end receivables will not be collected. Accounts receivable in the 2018 balance sheet will be valued at:

  Multiple Choice

• $1,600.

• $53,300.

• $51,700.

• $54,900.

Answer 1

ques 1 Answer :Part A $ 480,000 $ (168,000) Profit before tax Less:tax expense (480000*35%) net income $ 312,000 tax paid is not an expense Ques 2 Answer C :$54,800 Collection from customers Add:increase in accounts receivable Add:decrease in liabilities $73,700 $5,600 1,300 Less:Expenses Payment to customers Depriciation expense Decrease in prepaid expenses $ 19,700 $4,600 1,500 net income $54,800 Ques 3 Answer:part C Accounts receivable Less:allowance for doubtful debts Amount to be reported 53300 1600 51700