Question

Read the information below about Cobb Company:

- Operating Revenues $6,000
- General & Administrative Expenses $2,200
- Selling Expenses $1,800
- Other Revenues (Expenses) $800
- Income Tax Expense $600

What is Cobb's net income?
a. $2,200
b. $1,600
c. $2,800
d. $2,000

Answer 1

To calculate Cobb Company's net income, you subtract expenses from operating revenues and add other revenues, then subtract income tax expenses, resulting in a net income of $2,200.

Step-by-step explanation:

To determine Cobb Company's net income, we must consider all revenues and expenses listed. Here's how you can calculate it:

• Start with Operating Revenues: $6,000
• Subtract General & Administrative Expenses: $2,200
• Subtract Selling Expenses: $1,800
• Add Other Revenues: $800
• Subtract Income Tax Expense: $600

Using this information, net income can be calculated as follows:

$6,000 (Operating Revenues) - $2,200 (General & Administrative Expenses) - $1,800 (Selling Expenses) + $800 (Other Revenues) - $600 (Income Tax Expense) = $2,200 (Net Income).

Therefore, the net income for Cobb Company is $2,200.