At the end of the first month of operations for Jackson's Catering Service,the business had the following accounts: Cash,$19,000;Prepaid Rent,$500;Equipment,$5,000 and Accounts Payable $2,000.By the end of the month,Jackson's had earned $20,000 of Revenues,$1,000 of Utilities Expenses and $1,500 of Salaries Expenses.Calculate the net income to be reported by the company for this first month.
A) $20,000
B) $19,000
C) $17,500
D) $12,000

Question

Quizplus · Accepted Answer

Net Income = Revenues - Expenses
Revenues = $20,000
Expenses = $1,000 (Utilities) + $1,500 (Salaries) = $2,500
Net Income = $20,000 - $2,500 = $17,500

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