Question

Oregon Company

Adjusted Trial Balance
For the Year ended December 31, 2016

Debit
Cash $6,030
Accounts Receivable $2,100
Prepaid Expenses $700
Equipment $13,700
Accumulated Depreciation $$ 1,100

Credit
Accounts Payable $1,900
Notes Payable $4,200
Capital Stock $12,940

Debit
Dividends $790

Credit
Fees Earned $8,750

Debit
Wages Expense $2,500
Rent Expense $1,960
Utilities Expense $775
Depreciation Expense $250
Miscellaneous Expense $85
______
Totals
Total Debit: $28,890
Total Credit: $28,890
​
Determine the net income (loss) for the period.

a. Net Loss $790
b. Net Income $2,390
c. Net Income $3,180
d. Net Loss $5,570

Answer 1

The net income for Oregon Company's accounting period is calculated by subtracting the total expenses ($5,570) from the revenue ($8,750), resulting in a net income of $3,180.

Step-by-step explanation:

To determine the net income for the period for Oregon Company, we need to subtract the total expenses from the total revenues. In the adjusted trial balance provided, the only revenue account is 'Fees Earned' with a credit balance of $8,750.

Total expenses include 'Wages Expense' ($2,500), 'Rent Expense' ($1,960), 'Utilities Expense' ($775), 'Depreciation Expense' ($250), and 'Miscellaneous Expense' ($85), which add up to $5,570. Subtracting this total expense from the revenue, we get $8,750 - $5,570 = $3,180.

Hence, the correct answer is c. Net Income $3,180.