Arizona Company has the following information available for the month of April:
$\begin{array}{ll}
\text { Sales }&\$100,000\
\text { Cost of goods sold } & \$ 60,000 \
\text { Interest expense } & \$ 2,000 \
\text { Income taxexpense } & \$ 1,000 \
\text { Wages expense } & \$ 12,000 \
\text { Dividends declared } & \$ 3,000 \
\text { Equipment purchased } & \$ 20,000 \
\text { Rent expense } & \$ 4,000
\end{array}$
The company uses the accrual basis of accounting.What is the net income for the month of April?
A) $21,000
B) $22,000
C) $24,000
D) $27,000

Question

Quizplus · Accepted Answer

Net income is calculated as sales minus cost of goods sold, interest expense, income tax expense, wages expense, rent expense, and dividends declared, plus equipment purchased. In this case, net income is $100,000 - $60,000 - $2,000 - $1,000 - $12,000 - $4,000 - $3,000 + $20,000 = $21,000.

Arizona Company Has the Following Information Available for the Month