Question

On April 1, Anita Strods created a new travel agency. Strods Travel. The following transactions occurred during the company's first month.

April 2 Strods invested $45,000 cash and coepoter equipment worth $23,400 in the company in exchange for its co
stock.
April 3 The company rented furnished office space by paying $2,200 cash for the first month's (April) rant.
April 4 The company purchased $3,400 of office supplies for cash.
April 10 The company paid $2,320 cash for a 12-month insurance policy. Coverage begins on April 11, April 14 The company paid $1,828 cash for two weeks salaries warned by eployees.
April 24 The company collected $16,000 cash for commissions revenus.
April 28 The company paid $1,829 cash for two weeks salaries warned by seployees.
April 29 The company paid $500 cash for minor repairs to computar equipment.
April 30 The company paid $750 cash for this month's talephone bill. April 30 The company paid $1,900 cash in dividende.
Information for month-end adjustments follows:
a. Prepaid insurance of $140 expired this month.
b. At the end of the month, $1,050 of office supplies are still available. c. This month's depreciation on computer equipment is $390. d. Employees earned $728 of unpaid and unrecorded salaries as of month-end.
e. The company earned $1,830 of commissions revenue that is not yet recorded at month-end.

Answer 1

To calculate the net income for Strods Travel, add up the revenues and deduct the expenses.

Step-by-step explanation:

To calculate the net income for Strods Travel in the first month, we need to consider all the transactions and adjustments that occurred.

1. Calculate total revenues: $16,000 commissions revenue + $1,830 unrecorded commissions revenue = $17,830.
2. Calculate total expenses: $2,200 office space rent + $3,400 office supplies + $2,320 insurance + $1,828 salaries + $1,829 salaries + $500 repairs + $750 telephone bill + $1,900 dividends + $140 expired prepaid insurance + $390 depreciation + $728 unpaid salaries = $14,885.
3. Calculate net income: Total revenues - Total expenses = $17,830 - $14,885 = $2,945.

Therefore, Strods Travel had a net income of $2,945 in its first month of operation.