At the end of the first month of operations for Jackson's Catering Service, the business had the following accounts: Cash, $21,000; Prepaid Rent, $500; Equipment, $7,500 and Accounts Payable
$4,000. By the end of the month, Jackson's had earned $32,000 of Revenues, and used $1,800 of Utilities Expenses, $4,000 of Rent Expense and $3,600 of Salaries Expenses. Calculate the net income to be reported by the company for this first month.
A)$32,000
B)$26,200
C)$22,600
D)$23,100

Question

Quizplus · Accepted Answer

Net income is calculated as Revenues minus Expenses. Revenues are $32,000. Expenses include Utilities Expenses ($1,800), Rent Expense ($4,000), and Salaries Expenses ($3,600), totaling $9,400. Therefore, net income is $32,000 - $9,400 = $22,600.

At the End of the First Month of Operations for Jackson's