Question

Simon Company had the following summarized operations for the month of May: cash sales, $32,000; sales on account, $18,000; expenses paid in cash, $5,000; expenses incurred on credit, $10,000. In addition, the company purchased equipment for $8,000 on account and supplies for $5,000 cash. The net income for the month of May is

Answer 1

$35,000

Explanation:

The computation of net income for the month of may is given below:-

Net income for the month of may = Revenues - Expenses

= ($32,000 + $18,000) - ($5,000 + $10,000)

= $50,000 - $15,000

= $35,000

Therefore for computing the net income for the month of may we simply applied the above formula.

Hence, the net income is $35,000