Joe Jackson opened Jackson's Repairs on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books: Jackson invested $30,000 cash in the business. Jackson contributed $105,000 of equipment to the business. The company paid $2,500 cash to rent office space for the month of March. The company received $21,000 cash for repair services provided during March. The company paid $6,700 for salaries for the month of March. The company provided $3,500 of services to customers on account. The company paid cash of $1,000 for utilities for the month of March. The company received $3,600 cash in advance from a customer for repair services to be provided in April. Jackson withdrew $5,500 for his personal use from the company. Based on this information, net income for March would be:

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aquialaska aquialaska · Answer 1 · 2020-04-04T17:37:29+02:00

Answer:

$19,800

Explanation:

The computation of net income is shown below:-

Revenues = $21,000 for repair services + $3,500 for services of customers + $5,500 as dividend

= $30,000

Expenses = $2,500 for rent + $6,700 for salaries + $1,000 for utilities

= $10,200

Net income = Revenues - expenses

= $30,000 - $10,200

= $19,800

Therefore for computing the net income we simply subtract expenses from revenues.