Question

The following information relates to Swifty Corporation for the year 2022. Retained earnings, January 1, 2022 $36,480 Advertising expense $1,370 Dividends during 2022 3,800 Rent expense 7,900 Service revenue 47,500 Utilities expense 2,360 Salaries and wages expense 21,280 Other comprehensive income (net of tax) 300 After analyzing the data, compute net income.

Answer 1

Answer:

Net income is $55,170

Explanation:

The net income of a company is the effective amount left after all the expenses have been deducted.

To calculate net net income, we first of all have to classify the transactions as either expense or income, then we will subtract the total expenses from the total income. This is shown as follows;

Incomes                    Amount($)

Retained earnings =      36,480

Dividend                 =        3,800

service Revenue    =      47,500

other income          =           300

Total                                $88,080

Expenses                   Amount ($)

advertising         =      1,370

rent                     =      7,900

utilities                =      2,360

salaries and wages= 21,280

Total                        $32,910

Net income = Total income - Total expenses = 88,080 - 32910 = $55,170

Note that incomes are monies received by the company, while expenses are monies spent by the company.

And you should note that "net" is used to calculate the difference between two sets of opposite transactions.