Asked by Brianna Sparks on May 17, 2024
Verified
Luis Consulting started the year with total assets of $60000 and total liabilities of $17000. During the year the business recorded $48000 in consulting revenues and $36000 in expenses. Luis made an additional investment of $8000 and withdrew cash of $9000 during the year. The net income reported by Luis Consulting for the year was:
A) $3000.
B) $12000.
C) $18000.
D) $27000.
Net Income
The total profit of a company after all expenses and taxes have been subtracted from revenues.
Consulting Revenues
Income earned by a company for providing professional advice or services to other organizations or individuals.
Expenses
The economic costs that a business incurs through its operations to earn revenue.
- Compute the net income by subtracting expenses from revenues.
Verified Answer
AK
Amisha KumarMay 23, 2024
Final Answer :
B
Explanation :
Net income is calculated as revenues minus expenses. Therefore, for Luis Consulting, the net income is $48,000 (revenues) - $36,000 (expenses) = $12,000.
Learning Objectives
- Compute the net income by subtracting expenses from revenues.
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