The following balances were recorded in the books of Orange Valley Inc. on May 31, 2024. Calculate the net income:
Capital Account: $320,000 (Credit)
Drawings: $25,000 (Debit)
Sales: $550,000 (Credit)
Purchases: $230,000 (Debit)
Salaries: $60,000 (Debit)
Utilities: $16,000 (Debit)
Rent: $24,000 (Debit)
Miscellaneous Expenses: $6,000 (Debit)
Profit and Loss: $13,000 (Credit)
Requirements:
1.Determine total debits and credits.
2.Calculate the net income.
3.Analyze the impact of salaries on net income.
4.Discuss the financial implications of drawings.