Regent Plumbing Corporation provides plumbing services. Selected transactions of Regent Plumbing Corporation are described as follows:

a) Completed a plumbing repair project for a local lawyer and received $3,500 cash. b) Paid $5,000 cash for equipment to be used for plumbing repairs. c) Borrowed $11,000 from a local bank and deposited the money in the checking account. d) Paid $900 rent for the year. e) Paid $200 cash for plumbing supplies to be used next year. f) Completed a plumbing repair project for a local lawyer and received $3,000 cash. Calculate the net income. Assume plumbing supplies of $200 are left at the end of the accounting period. A. $700B. $2,100C. $2,800D. $3,000

Question

Emilia Mcmillan

Business

10 November, 02:33

Regent Plumbing Corporation provides plumbing services. Selected transactions of Regent Plumbing Corporation are described as follows:

a) Completed a plumbing repair project for a local lawyer and received $3,500 cash. b) Paid $5,000 cash for equipment to be used for plumbing repairs. c) Borrowed $11,000 from a local bank and deposited the money in the checking account. d) Paid $900 rent for the year. e) Paid $200 cash for plumbing supplies to be used next year. f) Completed a plumbing repair project for a local lawyer and received $3,000 cash. Calculate the net income. Assume plumbing supplies of $200 are left at the end of the accounting period. A. $700B. $2,100C. $2,800D. $3,000

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Belinda Mccullough · Answer 1

net income 5,600

Explanation:

a. - service revenue 3,500

b. - it do not affect the net income. Is trading one asset (cash) for another (equipment)

c. - it do not affect the income. It increase a liability (note payable) and an asset (cash)

d. - rent expense (900)

e. - it do not affect the net income. Is trading one asset (cash) for another (supplies)

f. - service revenue 3,000

net income = revenue - expenses

service revenue 3,500 + 3,000 = 6,500

rent expense (900)

net income 5,600