The following information relates to Blake Auto Supply. $$\begin{array} { | l | r | }
\hline \text { Net Sales Revenue } & \$ 215,000 \
\hline \text { Cost of Goods Sold } & 150,000 \
\hline \text { Interest Revenue } & 11,000 \
\hline \text { Operating Expenses } & 42,500 \
\hline
\end{array}$$ Calculate the net income of Blake Auto Supply.
A) $22,500
B) $33,500
C) $76,500
D) $240,000

Question

The following information relates to Blake Auto Supply. $$\begin{array} { | l | r | } 
\hline \text { Net Sales Revenue } & \$ 215,000 \
\hline \text { Cost of Goods Sold } & 150,000 \
\hline \text { Interest Revenue } & 11,000 \
\hline \text { Operating Expenses } & 42,500 \
\hline
\end{array}$$ Calculate the net income of Blake Auto Supply.
A) $22,500
B) $33,500
C) $76,500
D) $240,000

Quizplus · Accepted Answer

To calculate net income, we need to subtract total expenses from total revenue. 
Total revenue = $495,000 + $58,000 = $553,000
Total expenses = $357,500 + $162,000 + $10,000 + $10,000 + $20,000 + $10,000 + $15,000 = $585,500
Net income = Total revenue - Total expenses = $553,000 - $585,500 = -$32,500 
Since the net income is negative, it means there was a loss instead of a profit. Therefore, we need to choose the option with the closest positive number to the calculated net income. 
The closest positive number is option B: $33,500. So, the best choice is B.

The Following Information Relates to Blake Auto Supply Calculate the Net Income of Blake Auto Supply