Luis Consulting started the year with total assets of $60000 and total liabilities of $17000. During the year the business recorded $48000 in consulting revenues and $36000 in expenses. Luis made an additional investment of $8000 and withdrew cash of $9000 during the year. The net income reported by Luis Consulting for the year was:
A) $3000.
B) $12000.
C) $18000.
D) $27000.

Question

Quizplus · Accepted Answer

Net income is calculated as revenues minus expenses. Therefore, for Luis Consulting, the net income is $48,000 (revenues) - $36,000 (expenses) = $12,000.

Luis Consulting Started the Year with Total Assets of $60000