Question

The following accounts were taken from the Adjusted Trial Balance columns of the end-of-period spreadsheet: Accumulated...

The following accounts were taken from the Adjusted Trial Balance columns of the end-of-period spreadsheet:

Accumulated Depreciation $ 2,672
Fees Earned 15,186
Depreciation Expense 1,125
Insurance Expense 590
Prepaid Insurance 3,790
Supplies 1,026
Supplies Expense 3,822

Net income for the period is

a. $2161

b.$5537

c.$9649

d.$6977

Homework Answers

Answer #1
Computation of the Net Income
Particulars Amount ($)
Fees Earned 15,186
(-)Depreciation Expense 1,125
(-)Insurance Expense 590
(-)Supplies Expense 3,822
Net Income 9,649

Explanation:

  • Accumulated depreciation will be shown by way of deduction from the assets in the balance sheet.
  • Prepaid Insurance is an asset and will be shown in the balance sheet.
  • And supplies being as asset is shown in the balance sheet.
  • Fees earned being an income and rest all are expenses which will be deducted from the income to compute the net income.
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