Question

Use the adjusted trial balance for Stockton Company below to answer the questions that follow. Stockton Company Adjusted Trial Balance December 31 Cash 7,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation 1,100 Accounts Payable 1,900 Notes Payable 4,300 Common Stock 1,000 Retained Earnings 12,940 Dividends 790 Fees Earned 9,250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 185 Totals 30,490 30,490 Determine the net income (loss) for the period. net loss $790 net income $3,580 net loss $5,670 net income $9,250

Answer 1

The net income for Stockton Company is calculated by subtracting total expenses from total revenue. Upon calculation, the net income for the period is found to be $3,580.

Step-by-step explanation:

• To determine the net income for Stockton Company, we need to calculate the total revenues and subtract the total expenses.
• Fees Earned represent the total revenues, and the total expenses include Wages Expense, Rent Expense, Utilities Expense, Depreciation Expense, and Miscellaneous Expense.
• By adding up these expenses, we get $2,500 + $1,960 + $775 + $250 + $185 = $5,670.
• Subtracting the total expenses from the Fees Earned ($9,250 - $5,670), we get a net income of $3,580 for the period.

Answer 2

net income $3,580

Explanation:

The computation of net income (loss) is shown below:-

Net income (loss) = Fees Earned - Wages Expense - Rent Expense - Utilities Expense - Depreciation Expense - Miscellaneous Expense

= $9,250 - $2,500 - $1,960 - $775 - $250 - $185

= $3,580

Therefore we have applied the above formula to reach out the net income that is $3,580 net income by deducting the all expenses except prepaid insurance as it is treated as assets from the revenues earned