Using the data below, compute net income Accounts payable............120 Capital

Question

Using the data below, compute net income

Accounts payable............120

Capital stock...................400

Cash...............................100

Cost of goods sold..........250

Dividends........................160

Equipment.......................1,640

Inventory..........................550

Loans payable.................860

Prepaid rent....................50

Rent expense.................200

Retained earnings (beginning)...700

Sales revenue................1,200

Utilities expense.............330

Explanation / Answer

Hi,

Please find the answer as follows:

Thanks.

Sales Revenue
1200 Less Cost of Goods Sold
-250 Gross Profit
1450 Less Operating Expenses

Rent 200
Less Prepaid Rent -50 150 Utilities expense
330 Net Income
970

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