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Saved Help Save & EX Required information (The following information applies to the questions displayed below.) Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions: 1) issued stock for $74,000 2) borrowed $42,000 from its bank 3) provided consulting services for $72,000 4) paid back $32,000 of the bank loan 5) paid rent expense for $17,500 6) purchased equipment costing $29,000 7) paid $4,700 dividends to stockholders 8) paid employees' salaries, $38,000 What is Yowell's net income? Multiple Choice < Prey 1 of 8 Next >

Answer 1

Answer:

Income Statement
Revenues:
Service revenue		$72,000
Less: Expenses:
Rent expense	$17,500
Salaries expense	$38,000
Total Expenses		$55,500
Net income		$16,500

Explanations:

Transaction	Description	$	Effect on
1	Common stock	$74,000	Balance Sheet
2	Notes payable	$42,000	Balance Sheet
3	Service revenue	$72,000	Income Statement
4	Cash paid for above note	$32,000	Balance Sheet
5	Rent expense	$17,500	Income Statement
6	Equipment	$29,000	Balance Sheet
7	Dividends	$4,700	Statement of retained earnings
8	Salaries expense	$38,000	Income Statement