Question

Accounts payable $ 18400 Accounts receivable 11000 Accumulated depreciation – equipment 28000 Advertising expense 20600 Cash 15000 Common stock 41400 Dividends 13800 Depreciation expense 11900 Insurance expense 3100 Note payable, due 6/30/19 71400 Prepaid insurance (12-month policy) 6200 Rent expense 17300 Retained earnings (1/1/18) 58100 Salaries and wages expense 31400 Service revenue 133000 Supplies 4100 Supplies expense 5900 Equipment 210000 What is the company’s net income for the year ending December 31, 2018?

Answer 1

Answer:

$42,800

Explanation:

The computation of the net income for the year is shown below:

= Service revenue - advertising expense - depreciation expense - insurance expense - rent expense - salaries & wages expense - supplies expense

= $133,000 - $20,600 - $11,900 - $3,100 - $17,300 - $31,400 - $5,900

= $42,800

We simply deduct all the expenses from the service revenue so that the net income for the year could come