Reference no: EM133036588

Questions -

Q1. A company provides April cleaning services and charges the client $100,000. The client pays 20% of the charge in April and will pay the rest in May. The company incurs material and other expenses of $20,000 in April and will pay related labor costs of $40,000 in May. The company's effective tax rate is 30%. How much income after taxes should the company report for the month of April, based on accrual accounting?

-$28,000

-$21,000

-$56,000

-$0

Q2. Aston Corporation reported sales of $1,400,000 for the year. In addition, the company's accounts receivable balance grew from $120,000 at the beginning of the year to $170,000 at the end of the year. How much cash did Aston collect from customers during the year?

-$1,150,000

-$1,200,000

-$1,400,000

-$1,350,000

Q3. Luke Company reported cost of goods sold of $650,000 for the year. In addition, the company's inventory balance grew from $225,000 at the beginning of the year to $245,000 at the end of the year. How much cash did Luke spend on inventory purchases during the year?

-$670,000

-$600,000

-$700,000

-$630,000