Question

Nelson Company experienced the following transactions during Year 1, its first year in operation. 1. Acquired $8200 cash by issuing common stock. 2. Provided $4500 of services on account. 3. Paid $2150 cash for operating expenses. 4. Collected $3000 of cash from customers in partial settlement of its accounts receivable. 5. Paid a $210 cash dividend to stockholders. What is the amount of net income that will be reported on the Year 1 income statement? $2140. $1710. $1500. $2350.

Answer 1

Answer:

$2350.

Explanation:

The computation of the net income is shown below:

= Service revenue - operating expenses

= $4,500 - $2,150

= $2,350

The other items are related to the retained earning account, assets account, stockholder equity account. So, these items should not be considered in the computation part. Hence, ignored it