The following information relates to Nebula Inc. $$\begin{array} { | l | r | }
\hline \text { Sales Revenue } & \$ 230,000 \
\hline \text { Cost of Goods Sold } & 150,000 \
\hline \text { Interest Revenue } & 10,000 \
\hline \text { Operating Expenses } & 42,500 \
\hline \text { Sales Discounts } & 20,000 \
\hline \text { Sales Returns and Allowances } & 5,000 \
\hline
\end{array}$$ Calculate the net income of Nebula.

Question

The following information relates to Nebula Inc. $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 230,000 \
\hline \text { Cost of Goods Sold } & 150,000 \
\hline \text { Interest Revenue } & 10,000 \
\hline \text { Operating Expenses } & 42,500 \
\hline \text { Sales Discounts } & 20,000 \
\hline \text { Sales Returns and Allowances } & 5,000 \
\hline
\end{array}$$ Calculate the net income of Nebula.

Quizplus · Accepted Answer

Net income can be calculated as follows:

Sales Revenue - Cost of Goods Sold - Operating Expenses - Sales Discounts - Sales Returns and Allowances + Interest Revenue

= $230,000 - $150,000 - $42,500 - $20,000 - $5,000 + $10,000 
= $22,500

Therefore, the net income of Nebula is $22,500. The correct choice is B.

The Following Information Relates to Nebula Inc Calculate the Net Income of Nebula