Meadville, Inc. began operations during 2018. During January of 2018, the following transactions occurred:
.Received $95,000 from shareholders as initial investments
.Received cash of $90,000 for services performed during January
.Billed customers an additional $12,000 for services performed during January
.Borrowed $11,500 from Regions Bank Company, and signed a one-year note payable
.Paid rent in the amount of $5,000 for January
.Paid dividends in January amounting to $8,000
.Paid wages equal to $34,000 for January
How much net income should Meadville, Inc. report for January?

Question

Quizplus · Accepted Answer

To calculate the net income, we need to subtract total expenses from total revenue. 
Total revenue = $90,000 + $12,000 = $102,000
Total expenses = $5,000 + $8,000 + $34,000 + $11,500 = $58,500
Net income = $102,000 - $58,500 = $43,500 
Therefore, the net income for January should be $43,500, which is option B.