Corporation began the year with cash of $ 152 comma 000 and land that cost $ 33 comma 000. During the year Morton earned service revenue of $ 250 comma 000 and had the following expenses: salaries, $ 160 comma 000 ; rent, $ 73 comma 000 ; and utilities, $ 30 comma 000. At year-end Morton 's cash balance was down to $ 18 comma 000. How much net income (or net loss) did Morton experience for the year?

Question

Blaze Duarte

Business

29 March, 07:53

Corporation began the year with cash of $ 152 comma 000 and land that cost $ 33 comma 000. During the year Morton earned service revenue of $ 250 comma 000 and had the following expenses: salaries, $ 160 comma 000 ; rent, $ 73 comma 000 ; and utilities, $ 30 comma 000. At year-end Morton 's cash balance was down to $ 18 comma 000. How much net income (or net loss) did Morton experience for the year?

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Answers (1)

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Giada · Answer 1

Net loss = $13,000 (because expenses are greater than revenue)

Explanation:

The net income of an organisation is the positive difference between the service revenue of an organisation and the expenses of the organisation while the net loss is the negative difference between revenue and expenses meaning expenses are higher than revenue.

Net Income = Service Revenue - Expenses

Service Revenue = $250,000

Expenses = Salaries + Rent + Utilities

Expenses = $160,000 + $73,000 + $30,000 = $263,000

Net Income (net loss) = $250,000 - $263,000

Net loss = $13,000 (because expenses are greater than revenue).