• 100% Satisfaction Guarantee
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
510454
RD is online now

Beginning assets 42,000, liabilities 25,000, Ending assets

Customer Question

Beginning assets = 42,000, liabilities = 25,000, Ending assets = 60,000, liabilities = 34,000. Owners Equity: Onvestments = 0, withdrawals = 12,000. Income Statement: Revenues = 244,000, Expenses = ?. How do I calculate the Net Income
Submitted: 7 years ago.
Category: Tax
Expert:  RD replied 7 years ago.

Soln

Customer: replied 7 years ago.

my question was "how to calculate the net income" in otherwords, can you break it down please?

Expert:  RD replied 7 years ago.

I have provided you the step wise calculation in excel.

First you need to determine the owners equity, than the net income and than the expenses.

Customer: replied 7 years ago.

I suppose what I don't understand is how did you arrive at the figure of \$21,000, did you add or subtract, if so what are the actual figures that you used. This is new and very confusing to me so I really need the help

thanks

Customer: replied 7 years ago.

sorry, I guess I should be asking how you came up with the Expense amount of \$223,000? this is what I cannot figure out, this is my first accounting class and I'm really having a problem with it, I will be needing your services again soon I'm sure, I understand everything up to the Expenses, please reply as I am stuck and I can't move on until I understand what I'm doing because the system won't allow me to.

thank you

Customer: replied 7 years ago.
do you need another \$15 before you can completely answer the question?
Expert:  RD replied 7 years ago.

In order to determine the expense amount, you have the sales amount given but you need the net income.

Hence, you need to first find out the balance in equity account which is found out in Step 1 in the excel. It is calculated as Assets minus liabilities.

Once you find equity, you can find out the income for the year. This is calculated as Closing equity plus drawing minus the opening equity.

Once you have the net income, you will reduce the net income from sales to determine the expenses.

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

• I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Previous | Next >
• I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
• I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
• Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
• Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
• Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
• This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
• Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA

• Wallstreet Esq.

Satisfied Customers:

577
10 years experience
< Last | Next >

Wallstreet Esq.

Satisfied Customers:

577
10 years experience

Mark D

Satisfied Customers:

1245
MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Satisfied Customers:

3882
29 years of experience as a tax, real estate, and business attorney.

Robin D.

Satisfied Customers:

11072
15years with H & R Block. Divisional leader, Instructor

Megan C

Satisfied Customers:

8621
Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

Satisfied Customers:

2884
I've prepared all types of taxes since 1987.