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Astoria Co.had the following transactions during the month of August 2018:
(1)Cash received from bank loans was $20,000.
(2)Dividends of $9,500 were paid to stockholders in cash.
(3)Revenues earned and received in cash amounted to $33,500.
(4)Expenses incurred and paid were $26,000.
-What amount of net income will be reported on an income statement for the month of August?
A)$20,000.
B)$7,500.
C)$0.
D)$33,500.

Question

Quizplus · Accepted Answer

Net income is calculated by subtracting expenses from revenues. In this case, revenues were $33,500 and expenses were $26,000, so the net income is $33,500 - $26,000 = $7,500. Therefore, the best choice is B) $7,500.

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