Revenue on account amounted to $5,000. cash collections of accounts receivable amounted to $2,300. expenses for the period were $2,100. the company paid dividends of $450. what was net income for the period

In this case we shall assume that the organisation makes sales only on account, as information on cash sales is not given in the problem. Thus going as per this assumption, The total sales amount to $5000, and Expenses amount to $2100. Thus, net income can be found using the below formula:

Net Income= Revenue- Expense

Net Income= $5000-$2100

Net Income=$2900

The net income for the period is $2,900.

Further Explanation:

Gross Profit:  It is defined as the profit that a company earns after reducing the costs that are related to manufacturing and selling the products, or providing the services.

Net income: Net income is defined as the income earned by the company in a particular year. It is computed by subtracting the expenses for the particular year from the revenue of that particular year. Net income is added to the capital account of the company in the ending period.  

Given information:

Items to be considered to compute the net income for the period:

Computation of net income:

Net income for the period = Revenue on the account - Expenses for the period

        = $5,000 - $2,100

        = $2,900

Learn more:

1.Learn more about variable costing

2.Learn more about revenue from property taxes

3.Learn more about net income

Answer details:

Grade: Middle School

Subject: Accounting

Chapter: Income statement

Keywords:

revenue, cash collections, income statement, expenses, a particular period, accounts receivable, net income, considered, calculating, subtracting, variable costing.

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