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A company completed the following transactions during the month of October: I.Purchased office supplies on account,  $4400. II.Provided services...

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Accounting

A company completed the following transactions during the monthof October:

I.Purchased office supplies on account,  $4400.

II.Provided services for cash,  $22,000.

III.Provided services on account,  $13,000.

IV.Collected cash from a customer onaccount,  $8800.

V.Paid the monthly rent of  $16,000.

What was the company's net income for the month?

$13,000
$51,000
$19,000
$35,000

Answer & Explanation Solved by verified expert
4.3 Ratings (799 Votes)

$19,000

Working:

Net income for the month is calculated by taking into account all incomes and expenses.
Provided services for cash $       22,000
Provided services on account $       13,000
Total Income A $       35,000
Monthly Rent $       16,000
Total Expense B $       16,000
Net Income A-B $       19,000
Note:
Effect
I.Purchased office supplies on account, $4400. Assets will increase along with increase in liability.So, there is no income or expense effected.
IV.Collected cash from a customer on account, $8800. Only one asset will increase(Cash) and other will decrease (Accounts receivable).There is no income or loss effected.

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