Question

The assets and liabilities of Computer Service Corp. as of December 31, 2016, and revenues and expenses for the year ended on that date follow:

Land …………………………………………   $8,200     Equipment ……………………………………..   $35,000

Note payable …………………………..    31,000     Interest expense ……………………………        4,650

Property tax expense ………………      2,400     Interest payable ……………………………..       1,000

Rent expense …………………………..    13,000     Accounts payable …………………………..       9,000

Accounts receivable ………………..     26,500     Salary expense ……………………………….     34,000

Service revenue ………………………. 143, 000     Building ………………………………………….   125,000

Supplies ……………………………………     1,900      Cash ……………………………………………….     14,000

Utilities expense ………………………      2,700     Common stock ………………………………..       5,350

Beginning retained earnings was $114,000 and dividends totaled $36,000 for the year.

What was the net income of Computer Service Corp. for the year ended December 31, 2016?

Answer 1

Ans.	Net income =   Ending retained earnings + Dividends - Beginning retained earnings
		164250 + 36000 - 114000
		$86,250
	*Calculation of Ending Retained earnings:
	Assets	Amount	Liability & Equity	Amount
	Cash	14000	Notes payable	31000
	Supplies	1900	Interest payable	1000
	Accounts receivable	26500	Accounts payable	9000
	Building	125000	Common stock	5350
	Land	8200	Retained earnings (bal. fig.)	164250
	Equipment	35000
	Total	210600	Total	210600