Question

Sheffield Company completed its first year of operations on December 31, 2022. Its initial income statement showed that Sheffield had sales revenue of $193,500 and operating expenses of $88,000.

What is Sheffield Company's net income for 2022?
(A) $105,500
(B) $109,500
(C) $113,500
(D) $117,500

Answer 1

Sheffield Company's net income for 2022 is $105,500, calculated by subtracting operating expenses from sales revenue, using the formula: Net Income = Sales Revenue - Operating Expenses.

Step-by-step explanation:

The Sheffield Company's net income for 2022 can be calculated by subtracting the operating expenses from the sales revenue. According to the information provided, Sheffield had sales revenue of $193,500 and operating expenses of $88,000. Therefore, to calculate the net income:

Sales Revenue - Operating Expenses = Net Income

$193,500 - $88,000 = $105,500

Hence, the Sheffield Company's net income for the year 2022 is $105,500, which corresponds to option (A).