Author Question: On the income statement, the ending merchandise inventory is deducted from the cost of goods ... (Read 122 times)

Chloeellawright · **on:** Jul 6, 2018

On the income statement, the ending merchandise inventory is deducted from the cost of goods available for sale to yield income from operations.
Indicate whether the statement is true or false

Question 2

A city entered into a general government capital lease for equipment on July 1, 20X7 . The capitalizable cost of the equipment was 400,000 . A down payment of 40,000 was made. The next lease payment of 100,000 is due July 1, 20X8 .

The implicit rate of interest on the lease agreement is 10. The amount of expenditures that the city should report in its General Fund statement of revenues, expenditures, and changes in fund balance for the year ended December 31, 20X7 is
A. 40,000.
B. 58,000.
C. 400,000.
D. 418,000.