Davis Company has the following accounts and balances at the end of the year:
Cash, $1,200
Accounts Receivable, $280
Office Equipment, $3,000
Accounts Payable, $1,400
Income from Services, $3,500
Rent Expense, $670
Salaries Expense, $1,000
R. Davis, Capital at the beginning of the year was $2,050. Rob Davis also withdrew $800 from the company during the year. What is net income for the year?
A) $1,830
B) $3,500
C) $1,030
D) $5,080

Question

Davis Company has the following accounts and balances at the end of the year: 
Cash, $1,200
Accounts Receivable, $280
Office Equipment, $3,000
Accounts Payable, $1,400
Income from Services, $3,500
Rent Expense, $670
Salaries Expense, $1,000
R. Davis, Capital at the beginning of the year was $2,050. Rob Davis also withdrew $800 from the company during the year. What is net income for the year?
A) $1,830
B) $3,500
C) $1,030
D) $5,080

Quizplus · Accepted Answer

Net income is calculated by subtracting total expenses from total revenue. Total revenue is $3,500. Total expenses are $670 + $1,000 = $1,670. Therefore, net income is $3,500 - $1,670 = $1,830.

Davis Company Has the Following Accounts and Balances at the End