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27) Linda Keller opened an engineering office and titled the business Engineering Enterprises
P.C. During its first month of operations, it completed the following transactions:
I. Linda invested $30,000 in the business, which in turn issued common stock to her.
II. The business purchased equipment on account for $60,000.
II. The business provided engineering services on account, $10,000.
III. The business paid salaries to the receptionist, $2,000.
IV. The business received cash from a customer as payment on account $6,000.
V. The business borrowed $8,000 from the bank, issuing a note payable.
At the end of the month, total liabilities would be:
A) $8,000.
B) $60,000.
C) $68,000.
D) $70,000.
Answer: C
Explanation: C) Accounts Payable $60,000 + Note Payable $8,000 = $68,000
Diff: 3
LO: 2-3
AACSB: Analytical Thinking
AICPA Bus Persp: Strategic/Critical Thinking
AICPA Functional: Measurement
28) A company completed the following transactions during the month of October:
I. Purchased office supplies on account, $4,000.
II. Provided services for cash, $20,000.
III. Provided services on account, $32,000.
IV. Collected cash from a customer on account $27,000.
V. Paid the monthly rent of $3,000.
What was the company's total revenue for the month?
A) $20,000
B) $32,000
C) $52,000
D) $79,000
Answer: C
Explanation: C) $20,000 + $32,000 = $52,000
Diff: 3
LO: 2-3
AACSB: Analytical Thinking
AICPA Bus Persp: Strategic/Critical Thinking
AICPA Functional: Measurement