A company had credit sales of $33,000 and cash sales of $23,000 during the month of May. Also during May, the company paid wages of $26,000 and utilities of $12,000. It also received payments from customers on account totaling $5200. What was the company's net income for the month?

Question

Quizplus · Accepted Answer

Net income is calculated as total sales (credit + cash) minus total expenses (wages + utilities). Thus, net income = ($33,000 + $23,000) - ($26,000 + $12,000) = $56,000 - $38,000 = $18,000. Payments received on account do not affect net income calculation.

A Company Had Credit Sales of $33,000 and Cash Sales