Use the following appropriate amounts to calculate net income: Revenues,$12,000;Liabilities,$5,000;Expenses,$4,000;Assets,$19,000;Dividends,$4,000.
A)$6,000.
B)$8,000.
C)$4,000.
D)$14,000.

Question

Quizplus · Accepted Answer

Net Income = Revenues - Expenses - Dividends
Net Income = $12,000 - $4,000 - $4,000
Net Income = $4,000
Total Equity = Assets - Liabilities
Total Equity = $19,000 - $5,000
Total Equity = $14,000
Since Net Income increases equity, we can calculate the Net Income by subtracting Total Equity from the previous period from Total Equity in the current period. Therefore, the Net Income is $8,000.

Use the Following Appropriate Amounts to Calculate Net Income: Revenues,$12,000;Liabilities,$5,000;Expenses,$4,000;Assets,$19,000;Dividends,$4,000