Question

The following is a listing of some of the balance sheet accounts and all of the income statement accounts for Northview Company as they appear on the company's adjusted trial balance.

Accounts Payable $ 16,000
Accounts Receivable 17,000
Inventory 21,200
Advertising Expense 15,000
Cost of Goods Sold 113,000
Delivery Expense 6,600
Income Tax Expense 2,000
Insurance Expense 1,000
Rent Expense 14,400
Sales Revenue 220,000
Sales Discounts 10,400
Sales Returns & Allowances 28,000

What would be the net income of Northview Company?

Answer 1

The net income of Northview Company is $68,000.

Step-by-step explanation:

The net income of Northview Company can be calculated by subtracting the expenses (costs) from the revenues. The income statement accounts that represent revenues are Sales Revenue, Sales Discounts, and Sales Returns & Allowances. The income statement accounts that represent expenses are Advertising Expense, Cost of Goods Sold, Delivery Expense, Income Tax Expense, Insurance Expense, and Rent Expense.

To calculate the net income, you would subtract the total expenses from the total revenues. In this case, the total revenues are $220,000 and the total expenses are $15,000 + $113,000 + $6,600 + $2,000 + $1,000 + $14,400 = $152,000. Therefore, the net income of Northview Company would be $220,000 - $152,000 = $68,000.