Question

A company's December 31 work sheet for the current period appears below. Based on the information provided, what is net income for the current period?

Unadjusted Trial Balance Adjustments Debit Credit Debit Credit Cash 2,135 Accounts receivable 1,160 1,035 Prepaid insurance 1,760 810 Supplies 490 275 Equipment 8,480 Accumulated depreciation—equipment 880 350 Accounts payable 1,300 Retained earnings 10,070 Dividends 1,210 Fees earned 7,410 1,035 Rent expense 1,460 Salaries expense 2,460 Utilities expense 505 Insurance expense 810 Supplies expense 275 Depreciation expense—equipment 350 Totals 19,660 19,660 2,470 2,470

Answer 1

Answer:

$2,585

Explanation:

The Steps to answer this question requires adjustment to the unadjusted Trial Balance based on the figures given in the adjustments.

The Net Income for the period ended December 31, is calculated as follows

Particulars                                                                                  Amount

Fees Earned (Revenue 7,410+1,035)                                          $8445

Subtract the following Expenses

Depreciation (for the period and not accumulated)    350

Rent Expenses                                                             1,460

Salaries Expense                                                          2,460

Utiities Expense                                                               505

Insurance Expense                                                          810

Supplies Expense                                                            275

Total Expenses                                                                         ($5,860)

Net Income                                                                                 $2,585

Note: The remaining figures in the questions were not used because they relate to the Balance Sheet and not the income statement.

Good luck.