Questions: Receivable 7000 Payable 6000 Expense 6000 Repairs Expense 900 Truck 8000 Equipment 11,000 Notes Payable 26,000 Cash 8000 Supplies 11,000 Expense 26,000 Service Revenue 7500 Gasoline Expense 1200 Calculate the net income.

Solution Steps

To calculate the net income, we need to determine the total revenue and total expenses. Net income is calculated as total revenue minus total expenses. From the given data, we identify the revenue and expense accounts. Service Revenue is the only revenue account, while the expenses include Salaries Expense, Repairs Expense, Supplies Expense, and Gasoline Expense. We sum up the expenses and subtract them from the Service Revenue to find the net income.

The only revenue account is the Service Revenue, which is given as: \[ \text{Service Revenue} = 7500 \]

The expenses are as follows:

• Salaries Expense: \(6000\)
• Repairs Expense: \(900\)
• Supplies Expense: \(26000\)
• Gasoline Expense: \(1200\)

We sum the expenses: \[ \text{Total Expenses} = 6000 + 900 + 26000 + 1200 = 34100 \]

Net income is calculated by subtracting total expenses from total revenue: \[ \text{Net Income} = \text{Service Revenue} - \text{Total Expenses} = 7500 - 34100 = -26600 \]

Final Answer