Question

Using the following information, what is the amount of net income? Purchases $ 33,114 Selling expenses $ 677 Merchandise inventory, September 1 7,740 Merchandise inventory, September 30 11,372 Administrative expenses 665 Sales 50,575 Rent revenue 1,118 Interest expense 1,152 a.$31,089 b.$22,021 c.$11,977 d.$19,717

Answer 1

The net income is $32,961

Explanation:

To calculate the net income, we will classify the transaction into income and expenses, and compute the difference between their totals;

Income;

Merchandise inventory Sept. 1     =  $  7,740

Merchandise inventory Sept. 30  = $ 11,372

                                         Sales     =  $ 50,575

                                        Total      =  $ 69,687

Expenses;

Purchases                             = $ 33,114

Selling expenses                  = $     677

Administrative expense       = $     665

Rent Revenue                       = $    1,118

Interest expense                  = $     1,152

Total                                      = $  36,726

Net income = Total income - Total expenses

                    = 69,687 - 36,716

                    = $ 32,961