Question

An adjusted trial balance for Island Breeze Tours appears below. Adjusted Trial Balance dated April 30, 2020 for Island Breeze Tours showing the following: Debit of the Cash account for 9,300 dollars, Debit of the Accounts Receivable account for 1,200 dollars, Debit of the Supplies account for 800 dollars, Debit of the Prepaid Insurance account for 3,800 dollars, Debit to the Equipment account of 42,000 dollars. There are credits posted to following accounts: Accumulated Depreciation - Equipment of 3,450 dollars, Accounts Payable of 1,500 dollars, Salaries and Wages Payable of 1,200 dollars, Unearned Rent Revenue of 3,000 dollars, Owners Capital of 15,000 dollars, Service Revenue of 66,800 dollars, and Rent Revenue of 5,500 dollars. Additional credits are posted to the Salaries and Wages Expense account of 28,400 dollars, Supplies Expense account for 900 dollars, Rent Expense of 6,000 dollars, Insurance Expense of 2,400 dollars, and Depreciation Expense of 1,650 dollars. The total for the Debit column is 96,450 dollars. The total for the Credit column is 96,450 dollars. The net income for the month ended April 30, 2020, is

Answer 1

The net income of Island Breeze Tours for the month ended April 30, 2020, is $32,950.

What is net income?

The net income of Island Breeze Tours is the amount that is left after the costs (expenses) of rendering tour services are subtracted from the revenue.

For a trading organization, it is the revenue less the cost of goods sold and other administrative and selling expenses, including taxes. Thus, the net income is the profit earned for the owners by the business during a business period.

Data and Calculations:

Island Breeze Tours

Adjusted Trial Balanced

As of April 30, 2020

                                                          Debit     Credit

Cash                                                  $9,300

Accounts Receivable                          1,200

Supplies                                                 800

Prepaid Insurance                              3,800

Equipment                                       42,000

Accumulated Depreciation-Equipment          $3,450

Accounts Payable                                               1,500

Salaries and Wages Payable                             1,200

Unearned Rent Revenue                                  3,000

Owners Capital                                                15,000

Service Revenue                                            66,800

Rent Revenue                                                   5,500

Salaries and Wages Expense    28,400

Supplies Expense                            900

Rent Expense                               6,000

Insurance Expense                      2,400

Depreciation Expense                 1,650

Totals                                      $96,450      $96,450

Island Breeze Tours

Income Statement

For the month ended April 30, 2020

Service Revenue                                           $66,800

Rent Revenue                                                    5,500

Total Revenue                                               $72,300

Expenses:

Salaries and Wages Expense  $28,400

Supplies Expense                            900

Rent Expense                               6,000

Insurance Expense                      2,400

Depreciation Expense                 1,650     $39,350

Net income                                               $32,950

Thus, the net income of Island Breeze Tours for the month ended April 30, 2020, is $32,950.

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