Norris Company experienced the following transactions during 2013, its first yea

Question

Norris Company experienced the following transactions during 2013, its first year in operation.
1. Issued $8,400 of common stock to stockholders. 2. Provided $4,700 of services on account. 3. Paid $2,200 cash for operating expenses. 4. Collected $3,100 of cash from accounts receivable. 5. Paid a $220 cash dividend to stockholders.
The amount of net income recognized on Norris Company's 2013 income statement is:
Multiple Choice $1,820. $2,500. $2,280. $1,600. Norris Company experienced the following transactions during 2013, its first year in operation. 1. Issued $8,400 of common stock to stockholders. 2. Provided $4,700 of services on account. 3. Paid $2,200 cash for operating expenses. 4. Collected $3,100 of cash from accounts receivable 5. Paid a $220 cash dividend to stockholders. The amount of net income recognized on Norris Company's 2013 income statement is:

Explanation / Answer

The Answer is “ $2,500 “

Service revenue recognized on the service provided on account

$4,700

Less : Cash paid for operating expenses

($2,200)

Net Income recognized

$2,500

The amount of net income recognized on Norris Company's 2013 income statement is $2,500

Service revenue recognized on the service provided on account

$4,700

Less : Cash paid for operating expenses

($2,200)

Net Income recognized

$2,500

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