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Calculate income from operations for Jonas Company based on the following data: a. $173, 500 b. $485, 500 $226,000 d. $711, 500 Merchandise inventory at the end of the year was inadvertently overstated. Which of the following correctly states the effect of the error on net income, assets, and stockholders' equity? a. net income is overstated, assets are overstated, and stockholders' equity is overstated b. net income is understated, assets are understated, and stockholders' equity is understated c. net income is understate assets are understated, and stockholders' equity is overstated d. net income is overstated, assets are overstated, and stockholders' equity is understated Prepaid insurance is reported on the balance sheet as a a. long-term liability b. current asset c. fixed asset d. current liability An investor purchased 500 shares of common stock, $25 par, for $21, 750. Subsequently, 100 shares $49.50 per share. What is the amount of gain or loss on the sale? a. $600 gain b. $600 loss c. $12, 750 gain d. $9.250 loss Which of the following statements concerning taxation is accurate? a. Corporations pay federal and state income taxes. b. Only the owners must pay taxes on corporate income. c. Corporations pay federal income taxes but not state income taxes. d. Corporations pay income taxes but their owners do not. The initials GAAP stand for a. Generally Accepted Plans b. General Accounting Procedures c. Generally Accepted Accounting Practices

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