Question

During October, a firm had the following transactions involving revenue and expenses. Paid $1,275 for rent for October Provided services for $2,900 in cash Paid $280 for the October telephone service Provided services for $2,050 on credit Paid salaries of $1,750 to employees Paid $380 for the monthly office cleaning service Calculate the net income or net loss for the period?

Answer 1

Answer:

Net income   $1,265

Explanation:

The computation of the net income or net loss is shown below:

Revenues

Cash revenues    $2,900

Credit revenue    $2,050

Total revenues (a) $4,950

Less:

Expenses :  

Rent           ($1,275)

Telephone      ($280)

Salaries           ($1,750)

Office cleaning service ($380)

Total expenses (b) ($3,685)

Net income   $1,265  (a - b)