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Recall how to calculate net income using the following information: Total Assets = Liabilities + Common Stock - Dividends +Revenues - Expenses $50,000 = $10,000 +$10,000 - $2,000 + $35,000- $3,000 A) Revenues + Expenses = Net Income B) Assets - Liabilities = Net Income C) Revenues - Expenses = Net Income D) Common Stock - Expenses = Net Income
Recall how to calculate net income using the following information: Total Assets = Liabilities + Common Stock - Dividends +Revenues - Expenses $50,000 = $10,000 +$10,000 - $2,000 + $35,000- $3,000 A) Revenues + Expenses = Net Income B) Assets - Liabilities = Net Income C) Revenues - Expenses = Net Income D) Common Stock - Expenses = Net Income
Final answer:Net incomeis calculated by subtracting Expenses from Revenues. Given the values in this question, the net income would be $32,000. Total Assets value provided in the question accounts forLiabilities,Common Stock, Dividends, Revenues, and Expenses.Explanation:The formula to calculate net income is given byC) Revenues - Expenses = Net Income. Using the detailed information provided in the question, we have Revenues = $35,000 and Expenses = $3,000. Subtracting Expenses from Revenues we getNet Income = $32,000.This concept, similar to calculating accounting profit in chapter 7, is a basic principle of business finance, where net income or profit is determined by subtracting the costs (expenses) from the income (revenues). The net income is an important factor in the overall financial health and sustainability of a business.Understanding the 'T' account, assets are always equal to liabilities plus net worth. This principle helps us see that the Total Assets value provided in the question is accounted for when considering Liabilities, Common Stock, Dividends, Revenues, and Expenses.Learn more about Net Income here:brainly.com/question/32614743#SPJ11...