Best Plumbing Corporation provides plumbing services. Select

Best Plumbing Corporation provides plumbing services. Selected transactions of Best Plumbing Corporation are described as follows:

a) Received $9,000 cash and issued common stock to Sharon

b) Paid $5,000 cash for equipment to be used for plumbing repairs.
c) Borrowed $10,000 from a local bank and deposited the money in the checking account.
d) Paid $900 rent for the year.
e) Paid $400 cash for plumbing supplies to be used next year.
f) Completed a plumbing repair project for a local lawyer and received $4,000 cash.

Calculate the net income. Assume plumbing supplies of $400 are left.
A) $500
B) $3,600
C) $4,000
D) $3,100

ANSWER

D .Net income = Revenues – Expenses
Net income = $4,000 – $900 = $3,100