Question

Made cash sales of $49,000 (example).

Purchased $3,000 of additional supplies on account.
Borrowed $58,000 on long-term notes.
Purchased $18,600 in additional equipment, paying in cash.
Incurred $27,000 in selling expenses, paying two-thirds in cash and owing the rest on account.
Paid $4,700 in rent for this month, and also paid $4,700 for next month.
what is the preliminary net income of this statement

Answer 1

14,300

Step-by-step explanation:

Income:

Cash Sales 49,000

Expenses:

Supplies (3,000)

Selling Expense (27,000)

Current Rent (4,700)

Net Income 14300

• long term notes are non current liability hence no impact on income statement
• additional equipment are fixed asset so its a balance sheet item
• next month rent is prepaid expense which is current asset