AnswersTX-Money Matters ABusiness Income StatementsQuestion 3
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Business Income Statements

Question 3 • TX-Money Matters A

Below is last month's business income statement for Korey's Comics. Using the information provided in the statement, determine net income for Korey's Comics last month.Korey?s Comics Monthly Business Income Statement RevenueSales:$6,825 Returns:$215 Net Sales: Cost of Goods Sold Beginning Inventory:$780 Purchases:$1,795 Goods Available for Sale: Ending Inventory:$795 Total Cost of Goods Sold: Gross Profit:: Operating ExpensesWages:$1,460 Rent:$650 Utilities:$185 Advertising:$90 Taxes:$125 Total Operating Expenses: Net Income:

Answer
A
$2,320
B
$2,510
C
$4,830
D
$6,610

Explanation

Net sales are $6,825 − $215 = $6,610. Cost of goods sold is $780 + $1,795 − $795 = $1,780, so gross profit is $6,610 − $1,780 = $4,830. Operating expenses total $1,460 + $650 + $185 + $90 + $125 = $2,510. Subtracting expenses from gross profit gives net income of $4,830 − $2,510 = $2,320, choice A.

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