Question

Sammy’s Pizza opened on January 1, 2018. Sammy’s reported the following for cash revenues and cash expenses for the years 2018 to 2020: 2018 2019 2020 Cash Revenues $19,000 $29,000 $39,000 Cash Expenses $10,500 $13,500 $21,500 What would Sammy's Pizza report for net income and retained earnings for the years 2018, 2019, and 2020?

Answer 1

Answer:

Net income for 2018 is $8,500

Net income for 2019 is $15,500

Net income for 2020 is $17,500

Retained earnings from 2018 to 2020 is $41,500

Explanation:

Net income = cash revenue - cash expense

Net income for 2018 = $19,000 - $10,500 = $8,500

Net income for 2019 = $29,000 - $13,500 = $15,500

Net income for 2020 = $39,000 - $21,500 = $17,500

Retained earnings from 2018 to 2020 = net income for 2018 + net income for 2019 + net income for 2020 = $8,500 + $15,500 + $17,500 = $41,500