The following accounts were taken from the Adjusted Trial Balance columns of the work sheet:
$\begin{array}{l}
\begin{array}{lll}
\text { Accumulated Depreciation } \
\text { Fees Earned } \
\text { Depreciation Expense } \
\text { Insurance Expense } \
\text { Prepaid Insurance } \
\text { Supplies } \
\text { Supplies Expense }
\end{array}
\begin{array}{lll}
\$ 3,200 \
17,400 \
1,300 \
400 \
4,800 \
900 \
3,800
\end{array}
\end{array}$
Net income for the period is
A)$5,500
B)$11,900
C)$17,400
D)$8,700

Question

The following accounts were taken from the Adjusted Trial Balance columns of the work sheet: 
$\begin{array}{l}
\begin{array}{lll}
\text { Accumulated Depreciation } \
\text { Fees Earned } \
\text { Depreciation Expense } \
\text { Insurance Expense } \
\text { Prepaid Insurance } \
\text { Supplies } \
\text { Supplies Expense }
\end{array}
\begin{array}{lll}
\$ 3,200 \
17,400 \
1,300 \
400 \
4,800 \
900 \
3,800
\end{array}
\end{array}$ 
Net income for the period is
A)$5,500
B)$11,900
C)$17,400
D)$8,700

Quizplus · Accepted Answer

To find the net income, we need to subtract the total expenses from the total revenues. 
Total revenues = Fees earned = $17,400 
Total expenses = Depreciation expense + Insurance expense + Supplies expense - Decrease in prepaid insurance - Accumulated depreciation = $1,300 + $400 + $3,800 - ($4,800 - $3,200) - $3,200 = $4,300

Net income = Total revenues - Total expenses = $17,400 - $4,300 = $11,900 
Therefore, the answer is B.

The Following Accounts Were Taken from the Adjusted Trial Balance