Question

Joe Jackson opened Jackson's Repairs, Inc. on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books: 1. Jackson invested $32,000 cash in the business. 2. Jackson contributed $107,000 of equipment to the corporation. 3. The company paid $2,700 cash to rent office space for the month. 4. The company received $23,000 cash for repair services provided during March. 5. The company paid $6,900 for salaries for the month. 6. The company provided $3,700 of services to customers on account. 7. The company paid cash of $1,200 for monthly utilities. 8. The company received $3,800 cash in advance of providing repair services to a customer. Based on this information, net income for March would be:

$20,500. $6,000. $15,900. $20,400. $7,700.

Answer 1

Answer:

$15,900

Explanation:

Income statement  

Sales $ 26.700

Lease Expenses -$ 2.700

Salaries Expenses -$ 6.900

Utilities Expenses -$ 1.200

NET INCOME $ 15.900

The other items are a balance sheets entry that don't correspond to the Income Statement.

1. Jackson invested $32,000 cash in the business.

2. Jackson contributed $107,000 of equipment to the corporation.

8. The company received $3,800 cash in advance of providing repair services to a customer.

Answer 2

Answer: Option (c) is correct.

Explanation:

Total Expenses = Rent Expense + Utility expense + Salaries Expense

                          = $2,700 + $1,200 + $6,900

                          = $10,800

Revenue from Repair Service = $23,000 cash received +  $3700 provided on account

                                                 = $26,700

Net income = Revenue from Repair Service - Total Expenses

                   = $26,700 - $10,800

                   = $15,900