Question

Revenue on account amounted to $4,400. Cash collections of accounts receivable amounted to $2,600. Expenses for the period were $2,300. The company paid dividends of $550. Net income for the period was

Answer 1

Calculations of Net Income for the period (Assuming the Accrual Method of accounting):

It is given that Revenue on account amounted to $4,400. Expenses for the period were $2,300.

The Net income for the period using the Accrual Method of accounting can be calculated with the help of following formula;

Net Income = Sales Revenue – Expenses

= 4400-2300

= 2100

Hence, the net income for the period is $2,100