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Cambridge Cleaners Started Business on January 1 and Immediately Purchased

Question 85

Multiple Choice

Cambridge Cleaners started business on January 1 and immediately purchased $5,000 of supplies to use in the business.At the end of the month,30% of the supplies remain unpaid and 20% are still on hand.What amounts should appear as an expense on the financial statements for January?


A) income statement: $4,000; statement of cash flows: $1,500
B) income statement: $4,000; statement of cash flows: $3,500
C) income statement: $5,000; statement of cash flows: $3,500
D) income statement: $5,000; statement of cash flows: $5,000

Correct Answer:

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