Question

During 2012, Parker Enterprises generated revenues of 60,000. The company's expenses were as follows: cost of goods sold of30,000, operating expenses of 12,000, and a loss on the sale of equipment for2,000. What was the net income of Parker Enterprises in 2012?

1) $16,000
2) $18,000
3) $20,000
4) $22,000

Answer 1

The net income of Parker Enterprises for 2012 is calculated by deducting the sum of cost of goods sold, operating expenses, and a loss on the sale of equipment from the total revenues. The result is a net income of $16,000.

Step-by-step explanation:

The net income of Parker Enterprises in 2012, which is a key indicator of the company's financial performance for the year, can be calculated by subtracting the total expenses from the total revenues. To find the net income, start with the total revenues and then deduct the cost of goods sold, operating expenses, and any additional losses, such as the loss on the sale of equipment.

Parker Enterprises had total revenues of $60,000 for the year 2012. The expenses included:

• Cost of goods sold: $30,000
• Operating expenses: $12,000
• Loss on the sale of equipment: $2,000

Adding up all the expenses ($30,000 + $12,000 + $2,000), we get a total of $44,000. To calculate the net income, we subtract the total expenses from the total revenues:

$60,000 (total revenues) - $44,000 (total expenses) = $16,000 (net income)

Therefore, the net income of Parker Enterprises for the year 2012 was $16,000.