### Pre-Closing Accounts and BalancesOn December 31, Year 1, the following accounts and balances were drawn from the records of Carolina Company:- **Assets** - Cash: $4,100 - Accounts Receivable: $3,500 - Land: $3,300- **Liabilities** - Accounts Payable: $1,850- **Equity** - Common Stock: $4,000 - Retained Earnings: $6,000 - Dividends: $2,100- **Income Statement Accounts** - Revenue: $3,300 - Expense: $2,250### QuestionWhat is the amount of net income that will be reported on the Year 1 income statement?### Multiple Choice Options- $1,050- $250- $2,250- $3,300### Solution Explanation**Net Income Calculation:**- Net Income = Revenue - Expense- Net Income = $3,300 (Revenue) - $2,250 (Expense) = $1,050The correct answer is **$1,050**.

Net income is the amount of revenues which is left after deducting all the expenses of the business. It is added in the owner's equity.Calculation of net income :- Revenue - expense = $3,300 - $2,250 = $1,050 Hence, choice 1 is correct i.e. $1,050. Choice 2 is incorrect because it is less than the correct answer. Choice 3 is incorrect because it the amount of expense. Choice 4 is incorrect because it is the amount of revenue.

Business

Accounting

The following pre-closing accounts and balances were drawn from the records of Carolina Company on December 31, Year 1: $4,100 Accounts receivable 2,100 Common stock Land 3,300 Revenue 1,850 Expense Accounts payable Retained earnings 6,000 What is the amount of net income that will be reported on the Year 1 income statement? Cash Dividends Multiple Choice O $1,050 $250 $2,250 $3,300 $3,500 4,000 3,300 2,250

The following pre-closing accounts and balances were drawn from the records of Carolina Company on December 31, Year 1: $4,100 Accounts receivable 2,100 Common stock Land 3,300 Revenue 1,850 Expense Accounts payable Retained earnings 6,000 What is the amount of net income that will be reported on the Year 1 income statement? Cash Dividends Multiple Choice O $1,050 $250 $2,250 $3,300 $3,500 4,000 3,300 2,250

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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