Question

Raytheon's State College location had a gross income of $20,000,000 in 2018. In 2018 they also paid $3,000,000 in employee salaries, $4,000,000 in operating and maintenance costs, $800,000 in depreciation expense, and $210,000 in insurance for manufacturing facilities. Calculate the net income of Raytheon State College for 2018.

Answer 1

$11,990,000

Step-by-step explanation:

In the income statement, the total revenues and the total expenses are recorded.

If the total revenues are more than the total expenditure then the company earns net income

And, If the total revenues are less than the total expenditure then the company have a net loss

This net income or net loss would reflect in the statement of the retained earning account.

The computation of the net income is shown below:

= Gross income - employee salaries - operating and maintenance costs - depreciation expense - insurance for manufacturing facilities

= $20,000,000 - $3,000,000 - $4,000,000 - $800,000 - $210,000

= $11,990,000