Question

Nixon Corp. had rent revenue of $40,950. Expenses for the year ended December 31 are as follows: Utilities Expense, $7,000; Salaries Expense, $15,300; Miscellaneous Expense, $2,000; and Rent Expense, $12,450. Prepare the company's income statement for the year.

Answer 1

To calculate Nixon Corp.'s net income, total the expenses ($36,750) and subtract them from the rent revenue ($40,950), resulting in a net income of $4,200 for the year.

Step-by-step explanation:

To prepare Nixon Corp.'s income statement for the year, you firstly need to sum up all the expenses. The total expenses calculation is as follows:

• Utilities Expense: $7,000
• Salaries Expense: $15,300
• Miscellaneous Expense: $2,000
• Rent Expense: $12,450

Adding these expenses together gives us a total of $36,750.

Next, you will subtract the total expenses from the rent revenue. Here's the computation for net income:

1. Rent Revenue: $40,950
2. Total Expenses: ($36,750)
3. Net Income: $4,200

Therefore, Nixon Corp.'s income statement will show a net income of $4,200 for the year ended December 31.