The financial records for Harold Corporation included the following information: Accounts receivable, $60,000 Accounts payable, $25,000 Cash, $15,000 Common stock, $10,000 Dividends, $5,000 Rent expense, $10,000 Sales revenue, $75,000 Salaries and wages expense, $20,000 Based on this information, how much was its net income?

Question

Harris

Business

28 May, 15:07

The financial records for Harold Corporation included the following information: Accounts receivable, $60,000 Accounts payable, $25,000 Cash, $15,000 Common stock, $10,000 Dividends, $5,000 Rent expense, $10,000 Sales revenue, $75,000 Salaries and wages expense, $20,000 Based on this information, how much was its net income?

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Huerta · Answer 1

=$45,000

Explanation:

Net income = sales revenues - Expenses

For Harold Corporation;

sales revenues = $ 75,000

Expenses = Rent income $ 10,000

Salaries and wages expenses $20,000

Total expenses = 10+20 = $ 30,000

Net income = $75,000 - $30,000

= $45,000

Dividends, common stocks, accounts payable, and accounts receivables are not expenses relating to income-generating activities of the business; hence do not appear in the income statement.