Question

Northern Pine Company had the following account balances on December 31, 2017: Accounts Balances Cash $3,000 Accounts Receivable $3,500 Prepaid Insurance $2,800 Equipment $16,000 Accumulated Depreciation $7,000 Accounts Payable $1,500 Deferred Revenue $800 Notes Payable $1,200 Common Stock $3,200 Retained Earnings $8,600 Dividends $1,700 Service Revenue $18,200 Salaries Expense $9,250 Rent Expense $4,250 How much is Northern Pine Company's net income for the year ended December 31, 2017

Answer 1

Solution:
	Income Statement
	As on December 31, 2017
	Revenues:	Amount	Amount
	Service Revenue (A)		$            18,200
	Less: Expenses
	Salaries Expenses	$                  9,250
	Rent Expenses	$                  4,250
	Total Expenses (B)		$            13,500
	Net Income (A-B)		$              4,700
	Answer = $ 4,700
	Notes:
	Cash Balance , Account Receivable , Prepaid insurance are classified under
	current Assets
	Equipment is classified as under Fixed Assets and acc. Depreciation is as contra
	is as contra assets
	Account payable , Deferred revenue & note payable is classified in Liability section
	Common Stock, Retained Earnings & Dividend is part of Shareholder's Equity