Analyzing Revenues and Expenses and Preparing an Income Statement
Assume that you are the owner of College Connection, which specializes in items that interest students. At the end of January 2011, you find (for January only) this information:
a. Sales, per the cash register tapes, of $110,000, plus one sale on credit (a special situation) of $3,000.
b. With the help of a friend (who majored in accounting), you determine that all of the goods sold during January cost $50,000 to purchase.
c. During the month, according to the checkbook, you paid $37,000 for salaries, rent, supplies, advertising, and other expenses; however, you have not yet paid the $900 monthly utilities for January on the store and fixtures.
Required:
On the basis of the data given (disregard income taxes), what was the amount of net income for January? Show computations.