Blank Corporation reports the following account balances for 20XX:
| Accounts payable | $ 15,200 | Miscellaneous expense | 850 |
| Accounts receivable | 185,000 | Rent expense | 14,600 |
| Capital stock | 200,000 | Retained earnings, 1-01 | 432,000 |
| Cash | 76,950 | Sales | 585,000 |
| Cost of sale | 326,000 | Supplies | 12,400 |
| Dividends | 2,000 | Supplies expense | 8,100 |
| Equipment | 275,000 | Wages expense | 84,500 |
| Land | 250,000 | Wages payable | 3,200 |
What is Blank’s net income for the year?
$150,950
$148,950
$335,950
$333,950
To calculate Blank Corporation’s net income for the year, we need to prepare an income statement by subtracting all the expenses from the revenues. The formula for calculating net income is:
Net Income = Revenues – Expenses
Let’s break down the information provided and calculate the net income step by step:
1. Revenues:
– Sales: $585,000
2. Expenses:
– Cost of Sale: $326,000
– Rent Expense: $14,600
– Supplies Expense: $8,100
– Miscellaneous Expense: $850
– Wages Expense: $84,500
Now, let’s calculate the net income:
Net Income = (Revenues) – (Expenses)
Net Income = ($585,000) – ($326,000 + $14,600 + $8,100 + $850 + $84,500)
Net Income = $585,000 – $434,050
Net Income = $150,950
So, Blank Corporation’s net income for the year is $150,950.
Therefore, the correct answer to the question is:
– $150,950
In summary, Blank Corporation’s net income for the year is $150,950, which is calculated by subtracting all the expenses from the revenues on their income statement. This figure represents the company’s profitability for the specified period.
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