Table 5-1 $$\begin{array} { | l | r | }
\hline \text { Sales revenue } & \$ 480,000 \
\hline \text { Cost of goods sold } & 300,000 \
\hline \text { Sales discounts } & 20,000 \
\hline \text { Sales retums and allowances } & 15,000 \
\hline \text { Operating expenses } & 85,000 \
\hline \text { Interest revenue } & 5,000 \
\hline
\end{array}$$
-Referring to Table 5-1, what is the net income?
A)$60,000
B)$65,000
C)$55,000
D)$180,000

Question

Table 5-1 $$\begin{array} { | l | r | } 
\hline \text { Sales revenue } & \$ 480,000 \
\hline \text { Cost of goods sold } & 300,000 \
\hline \text { Sales discounts } & 20,000 \
\hline \text { Sales retums and allowances } & 15,000 \
\hline \text { Operating expenses } & 85,000 \
\hline \text { Interest revenue } & 5,000 \
\hline
\end{array}$$
-Referring to Table 5-1, what is the net income?
A)$60,000
B)$65,000
C)$55,000
D)$180,000

Quizplus · Accepted Answer

Net income is calculated by subtracting all expenses and costs from total revenues. Here, net sales revenue is $480,000 - $20,000 (sales discounts) - $15,000 (sales returns and allowances) = $445,000. Adding interest revenue gives $445,000 + $5,000 = $450,000. Subtracting cost of goods sold ($300,000) and operating expenses ($85,000) from this total gives a net income of $450,000 - $300,000 - $85,000 = $65,000.

Table 5-1 -Referring to Table 5-1, What Is the Net Income? A)$60,000

Table 5-1 -Referring to Table 5-1, What Is the Net Income?
A)$60,000