As of December 31, 2023, Blue Ridge Co. has the following balances. Calculate the net income for the company.
•Capital Account: $250,000 (Credit)
•Drawings: $25,000 (Debit)
•Sales: $450,000 (Credit)
•Purchases: $200,000 (Debit)
•Salaries: $70,000 (Debit)
•Utilities: $15,000 (Debit)
•Rent: $30,000 (Debit)
•Miscellaneous Expenses: $7,000 (Debit)
•Profit and Loss: $12,000 (Credit)
Requirements:
1.Calculate the total debits and credits.
2.Compute the net income.
3.Discuss the effect of drawings on the financial health of the company.
4.Suggest ways to improve net income.