Question

The 2016 income statement of Seikoson shows operating revenues of $130,800, selling expenses of $37,100, general and administrative expenses of $34,900, interest expense of $900, and income tax expense of $11,430. Seikoson's stockholders' equity was $280,000 at the beginning of the year and $320,000 at the end of the year. The company has 20,000 shares of stock outstanding at December 31, 2016. Read the information about Seikoson. What is Seikoson's net income?

a. $92,190
b. $130,800
c. $46,470
d. $80,000

Answer 1

Seikoson's net income is $46,470.

Step-by-step explanation:

To calculate Seikoson's net income, we need to subtract all the expenses from the operating revenues. The selling expenses are $37,100, general and administrative expenses are $34,900, interest expense is $900, and income tax expense is $11,430. Adding up all these expenses, we get $37,100 + $34,900 + $900 + $11,430 = $84,330. To find net income, we subtract this total expense from the operating revenues: $130,800 - $84,330 = $46,470.