ACCOUNTING CRASH COURSE EXAM V4 FROM WALL STREET PREP ACTUAL EXAM

ACCOUNTING CRASH COURSE EXAM V4 FROM WALL STREET PREP ACTUAL EXAM Assume US GAAP to answer this question. In 2017, $2 million in wages were earned and no cash wages were paid. In 2018, $8 million in wages were earned and $7 million in cash wages were paid. - Cash wages were used to first pay wages earned in 2017 with the remainder used to pay wages earned in 2018. - Any earned but unpaid wages will be paid during the first quarter of 2019. Using only the information provided, which of the following statements is most accurate? Liabilities increased by $1.0 million in 2018 Liabilities increased by $3.0 million in 2018 Assets decreased by $5.0 million in 2018 Retained earnings decreased by $10.0 million in 2018 Retained earnings decreased by $7.0 million in 2018 - Liabilities increased by $1.0 million in 2018 A company reported gross profit of $20 million in 2018. In addition, it recorded the following activities: Sales and marketing expenses were $5 million. Interest income was $2 million. Sold equipment for $5 million that had a net book value of $9 million. $3 million in preferred stock issuance. Company's tax rate is 40%. Calculate the company's net income. $5.4 million $6.0 million $6.8 million $7.2 m