Question

upon reviewing the financial statements, you have determined that the sales revenue listed on the financial statements is incorrect and should actually be $15,000 instead of $5,000. assuming all other accounts are accurate, what would the new net income be? (enter your answer as a whole number and don't use punctuation, example $7,800 would be 7800)

Answer 1

To calculate the new net income after correcting the sales revenue from $5,000 to $15,000, we add the $10,000 difference to the original net income, assuming all other accounts are accurate.

Step-by-step explanation:

The subject of the question involves determining the correct net income after identifying an error in the sales revenue figure on the financial statements. To calculate the new net income, we must adjust the sales revenue and then subtract the explicit costs from this corrected revenue figure.

As per the information provided, the original sales revenue was incorrectly stated as $5,000 and should be $15,000. If all other accounts are accurate and unchanged, this means we must increase the revenue by $10,000. Let's assume the original net income was correctly calculated with the $5,000 sales revenue figure.

To find the new net income, we add the $10,000 difference to the original net income. Since the question does not provide the original net income, we will use the illustrated example from SELF-CHECK QUESTIONS where if a firm had sales revenue of $1 million (which we'll substitute with the corrected $15,000) and explicit costs totaling $950,000 (substitute with $5,000 original revenue plus any other costs if provided), the accounting profit would be the difference between these two figures.